PSX crosses 128,000 mark as bullish momentum continues into FY2025-26

The Pakistan Stock Exchange (PSX) began the new fiscal year on a strong note, with the benchmark KSE-100 index crossing the 128,000 barrier amid bullish investor sentiment and improving macroeconomic indicators.

By 12:15 PM on Tuesday, the KSE-100 index had surged by 2,404.51 points, or 1.9%, to reach 128,031.82, up from the previous close of 125,627.31.

Market experts attributed the rally to a combination of easing geopolitical tensions, expectations of monetary easing, and optimism surrounding upcoming corporate earnings.

Yousuf M Farooq, Director of Research at Chase Securities, said the market is now “pricing in a gradual decline in interest rates alongside improving economic stability.” 

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He noted that the rally entered its second phase, marked by rising public participation and a broad-based recovery across sectors.

Awais Ashraf, Director of Research at AKD Securities, pointed to a shift in investor preferences from fixed income to equities due to higher taxation on fixed income returns under the new budget. 

“High-dividend-yield stocks are gaining favour as investors seek better returns amid falling inflation,” he said.

Ashraf added that sectors tied to structural reforms and monetary easing, especially those within the energy value chain, are likely to remain in focus.

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The PSX had already ended the final session of FY2024-25 on a high, with the index hitting a record level above 125,000 points. The late surge was supported by aggressive buying at attractive valuations and strong year-end fund flows.

Meanwhile, the Ministry of Finance, in its Monthly Economic Update and Outlook for June, projected a positive trajectory for FY2025-26.

Exports are expected to rise, inflation is forecast to remain moderate at 5–7%, and demand for Pakistani goods is likely to strengthen as economic conditions improve globally.

Inflation for June is expected to remain between 3–4%, indicating continued price stability as the new fiscal year begins.