The Pakistan Stock Exchange (PSX) reached a new milestone as the benchmark KSE-100 Index surpassed the 190,000 level for the first time, reflecting investor optimism ahead of the State Bank of Pakistan’s (SBP) upcoming monetary policy announcement.
Market Performance and Investor Sentiment
On Monday, the KSE-100 Index traded between an intraday low of 189,712.78 and a high of 191,032.73, closing up by 1,865.91 points or 0.99% compared to the previous close of 189,166.82. This upward movement was influenced by expectations of a 50-basis-point reduction in interest rates by the SBP’s Monetary Policy Committee.
Huzaifa Riaz, Director at Mayari Securities, noted that the market opened positively amid signs of easing tensions between the US and Iran. Investors remained cautious ahead of the policy decision, with hopes that a dovish stance from the SBP could further boost equity markets.
Economic Indicators Supporting Growth
Analysts highlight several factors contributing to the positive market tone, including prospects for additional monetary easing, improving external economic indicators, and stable political conditions. These elements are supporting risk appetite among investors.
- The current account deficit stood at $244 million in December 2025.
- Foreign direct investment recorded a net outflow of $135 million in the same period.
- Power generation increased by 8.8% year-on-year.
- Information technology exports reached a record $437 million, a 26% increase.
- SBP’s foreign exchange reserves rose from $16 billion to $16.1 billion.
- The Pakistani rupee appreciated slightly to 279.86 per US dollar.
Outlook and Market Projections
Market experts suggest that confirmation of the anticipated rate cut could sustain the rally, although profit-taking near record index levels remains a possibility. Some brokerage firms project the KSE-100 Index could reach 263,800 by December 2026, supported by expected foreign portfolio and direct investment inflows and improving diplomatic relations with key partners.
In the previous week, the index gained 4,068 points, or 2.2%, with average daily trading volumes increasing by 8.7% to 1.3 billion shares. On the last trading day, the benchmark rose by 1,478.66 points (0.79%), trading within a range of 186,637.57 to 189,566.64 points.
