The Pakistan Stock Exchange opened the week on a strong note as bullish momentum returned to the market, with the benchmark KSE-100 Index climbing over 650 points during early trading hours. By 10:25am on Monday, the index had surged to 122,805.64 points, reflecting an increase of 662.08 points or 0.54 percent. The renewed buying interest came after a week marked by both optimism and caution.
Investor sentiment was visibly robust across several key sectors, including automobile assembly, commercial banking, oil and gas exploration, oil marketing, and power generation. Leading index contributors such as HUBCO, MARI, OGDC, PPL, POL, FFC, UBL, and MCB all traded positively, signaling a broad-based interest in sectors closely linked with the country’s economic fundamentals.
The early uptick in the KSE-100 comes on the heels of a volatile trading week where geopolitical developments weighed on investor confidence. Despite a strong start last week, driven by the unveiling of the federal budget for FY2025–26 and hopes of monetary policy easing, market sentiment was briefly derailed by renewed tensions in the Middle East. However, the market still ended the previous week in green territory, with the index gaining 502 points week-on-week and closing at 122,144, marking a 0.4 percent increase.
The key catalyst for last week’s resilience and the ongoing upward trajectory appears to be the federal government’s Rs17.3 trillion budget. The financial plan, while expansive, did not include any negative surprises for the equity market. In particular, capital gains tax provisions were viewed as favorable by market participants, especially institutional investors and mutual funds, who responded by increasing exposure to domestic equities.
Another driver behind the current bullish sentiment is the renewed focus on domestic macroeconomic indicators, with investors shifting attention away from short-term geopolitical risks. Corporate earnings forecasts and expectations of continued monetary policy support are reinforcing confidence, as market participants recalibrate their strategies around improving fiscal fundamentals and sector-specific performance.
The rise in key sector stocks indicates growing optimism about long-term profitability and sectoral stability. Banks, in particular, have remained strong amid expectations of improved credit growth, while oil and gas companies have attracted fresh interest due to the rebound in global energy demand and regional pricing dynamics. The automobile sector, too, is seeing increased investor participation as vehicle sales and local manufacturing indicators improve.
Though external pressures persist, particularly related to regional instability, the early gains on Monday highlight that investors are recalibrating their outlooks to align with domestic policy signals and corporate performance indicators. The trend suggests cautious optimism as the market digests the implications of the fiscal roadmap and looks for signs of continued economic consolidation.
If sustained, the current momentum may help push the benchmark index further upwards in the near term, reflecting a broader confidence in Pakistan’s economic recovery and market direction.