The Pakistan Stock Exchange (PSX) extended its historic rally on Tuesday, with the benchmark KSE-100 Index climbing back above the 120,000 mark. The surge was fueled by three major developments: the ceasefire agreement with India, renewed International Monetary Fund (IMF) support, and expectations of tax relief in the upcoming federal budget.
Building on Monday’s record-breaking gains, the KSE-100 Index surged to an intraday high of 120,067.12 points — up 2,769.39 points (2.36%) from the previous close of 117,297.73. This marks the index’s return to the 120,000 level for the first time since April 4.
Investor confidence was buoyed by easing geopolitical tensions and improving macroeconomic indicators. According to Ahfaz Mustafa, CEO of Ismail Iqbal Securities, “The market is digesting a wave of positive events including the IMF approvals, monetary easing, and diplomatic de-escalation with India. Much of this had been previously overshadowed by tensions.”
He also pointed to media reports suggesting the budget is being framed with an exchange rate of Rs290/USD — a signal of controlled inflation ahead.
Finance Minister Mohammad Aurangzeb confirmed to Reuters that Pakistan will receive a $1 billion IMF tranche as part of its $7 billion Extended Fund Facility (EFF), with an additional $1.4 billion approved under the Resilience and Sustainability Facility (RSF) to support climate initiatives. He downplayed the fiscal impact of recent military escalations, indicating no need for a revised economic outlook.
Further boosting sentiment, the government has proposed Rs50 billion in income tax relief for the salaried class. This move comes as salaried taxpayers contributed over Rs450 billion in the first 10 months of FY25 — significantly more than retailers and exporters combined.
Adding to the market’s optimism, April inflation dropped to a record 0.3% year-on-year, prompting the State Bank of Pakistan to cut its policy rate by 100 basis points to 11%, signaling a shift toward pro-growth monetary policy.
Monday’s session saw the KSE-100 record its biggest single-day point gain ever — rising by 10,123.09 points (9.45%) — following the India-Pakistan ceasefire announcement, which was reportedly facilitated by the United States.
With geopolitical risk easing, IMF funding secured, and budget expectations turning favorable, the KSE-100 Index continues to ride a powerful wave of investor optimism.
