KARACHI: The Pakistan Stock Exchange (PSX) on Monday crossed the 133,000-point barrier to hit a record high, market data showed, with analysts attributing the rally to hopes of banking dividend payouts and a United States-Pakistan trade deal.
The benchmark KSE-100 index rose by 1,421.08 points, or 1.08 percent, to close at 133,370.14 points, compared to the previous day’s close of 131,949.06 points, according to the PSX website.
“The rally persisted throughout the day, with the index hitting an intraday high of 133,862, fueled by strong performance in banking stocks amid expectations of robust earnings and dividend payouts for the June quarter,” Naveed Nadeem, senior equity trader at Karachi-based Topline Securities brokerage firm, said in their market review.
“Textile stocks also advanced, likely supported by optimism over a potential tariff agreement with the US.”
US President Donald Trump imposed in April steep tariffs on a number of countries, a move widely viewed as a setback for the global economy still recovering from the coronavirus pandemic.
There have been reports that the US and Pakistan, which faced 29 percent tariff on its goods that was paused for three months, have reached an understanding on a deal ahead of a July 9 deadline that could shape the future of the South Asian country’s key export sectors.
While optimism prevailed over a possible trade tariff deal, positive developments over the macroeconomic front also played a key role in driving the bulls at the market.
“Stocks closing to new all-time high showed recovery on receding fears over US trade tariff after a trade agreement was [reportedly] reached, preventing 29 percent trade tariff on Pakistan,” Ahsan Mehanti of Arif Habib Corporation told Arab News.
“Investors weigh surging foreign exchange reserves. Rupee stability and government’s deliberation for privatization of SOEs (state-owned enterprises} played a catalyst role in record surge.”
Pakistan’s stocks have surged as Islamabad moves to consolidate its financial recovery after years of economic turbulence, with the country’s foreign exchange reserves rising to $14.5 billion in June.
In recent years, the South Asian country has implemented tough structural reforms under the International Monetary Fund (IMF) loan programs, aimed at reducing fiscal deficits and restoring investor confidence.
“The regional and geopolitical issues also subsided last month which has further given confidence to local investors,” Shankar Talreja, head of research at Topline Securities, told Arab News, referring to the Pakistan-India and Iran-Israel conflicts.
“We expect the index to touch 160,000 [points] by June 2026.”
