PSX Starts FY26 on a Positive Note

The Pakistan Stock Exchange (PSX) began the fiscal year 2025-26 with a strong performance, as the KSE-100 Index surged past the 128,000-point mark during early trading on Tuesday. This milestone reflects robust investor confidence, driven by positive economic indicators and recent policy developments.

The KSE-100 Index, a key benchmark for the PSX, gained nearly 1,100 points in the opening minutes, reaching 128,054.32 by mid-morning. Strong buying interest in sectors such as commercial banks, oil and gas exploration, and power generation fueled the rally. The market’s upward trajectory builds on the momentum from the previous fiscal year, where the KSE-100 Index rose by 58.6% in PKR terms, closing at 124,379 points.

Analysts attribute the bullish sentiment to the approval of the federal budget for FY26, which includes a Rs17.57 trillion outlay and avoids significant new taxation measures. Stable macroeconomic conditions, including a projected GDP growth of 3.34% for FY26, led by agriculture and supported by industrial and service sectors, have further bolstered optimism. Posts on X highlight the market’s positive response to easing geopolitical tensions and the smooth passage of the Finance Bill, which have encouraged investors to anticipate sustained growth.

Looking ahead, experts suggest that the PSX remains undervalued, with a forward price-to-earnings ratio of 5.7x compared to a 10-year average of 7.0x. A potential credit rating upgrade and planned Eurobond issuances could strengthen Pakistan’s economic outlook, supporting further market gains. However, maintaining this momentum will depend on consistent policy implementation and adherence to IMF conditions.

Published in SouthAsianDesk, July 1st, 2025

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