Post Federal Budget: PSX Rises by Nearly 1,600 Points

The Pakistan Stock Exchange (PSX) experienced a significant upswing, with the KSE-100 Index climbing nearly 1,600 points on Friday, following the National Assembly’s approval of the Rs17.57 trillion federal budget for the 2025-26 fiscal year. The index reached an intraday high of 123,628.23, reflecting a 1.3% increase, driven by robust investor confidence.

The budget, passed on Thursday with 201 coalition votes against 57 opposition votes, introduced Rs463 billion in new taxes and brought the digital economy under tax regulations. Analysts attribute the market’s positive response to the absence of aggressive tax hikes on equities and dividends, which had been a concern for investors. The budget’s focus on fiscal discipline, projecting a 4.2% GDP growth and a 19% increase in revenue collection by the Federal Board of Revenue, further bolstered market sentiment.

Trading activity was strong, with over 81 million shares exchanged, valued at approximately Rs9 billion. Posts on X echoed this optimism, noting the KSE-100 Index’s gain of over 1,000 points in early trading, signaling a return of buying momentum after the budget’s passage. The market’s resilience was also evident in its 1.69% week-to-date rise, despite recent volatility linked to geopolitical tensions and profit-taking.

This surge follows a record rally earlier in the week, when the KSE-100 gained over 6,000 points due to a ceasefire announcement between Iran and Israel, highlighting the market’s sensitivity to both domestic and global developments. With macroeconomic indicators like easing inflation at 3.5% and a reduced trade deficit, the PSX appears poised for continued growth, provided political stability and policy consistency are maintained.

Published in SouthAsianDesk, June 27th, 2025

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