The Pakistan Stock Exchange (PSX) witnessed a robust rebound on Monday, marking a significant turnaround in market sentiment as the benchmark KSE-100 index surged by 2,436.69 points or 1.49%, closing at 166,242.90. The rally was largely driven by strong buying activity in the banking sector, coupled with encouraging macroeconomic data and easing regional tensions that collectively revived investor confidence.
The trading session opened with cautious optimism, as the index initially dipped to an intra-day low of 164,281.95, showing a modest decline of 0.29%. However, renewed investor interest soon emerged, propelling the index to an intra-day high of 166,421.33 before closing slightly below that mark. The turnaround reflected a shift in sentiment following a period of subdued performance, with market participants responding positively to improving fundamentals and geopolitical developments.
One of the key drivers of Monday’s rally was the strong performance of the banking sector, which led the market recovery. KTrade Securities noted that major financial institutions including Habib Bank (+4.78%), United Bank (+2.23%), Bank of Punjab (+9.99%), National Bank of Pakistan, Askari Bank, Bank Alfalah, and Meezan Bank played a leading role in lifting the overall index. The momentum was further supported by Oil and Gas Development Company, which added additional strength to the broader market trend.
According to data released by the State Bank of Pakistan (SBP), the country posted a current account surplus of $110 million for September 2025, reversing a deficit of $325 million in August. This marked a significant improvement compared to the $52 million deficit recorded in the same month last year, reflecting growing external sector stability. In addition, technology exports recorded an impressive 25% year-on-year increase to $366 million, underscoring the resilience and expansion of Pakistan’s services and digital economy.
Geopolitical developments also played a vital role in shaping investor optimism. Reports of a ceasefire and peace talks in Doha, Qatar, between Pakistan and Afghanistan eased regional uncertainties, providing a boost to overall market sentiment. Analysts highlighted that the reduction in regional tensions, coupled with the recent staff-level agreement between Pakistan and the International Monetary Fund (IMF), contributed to a more stable macroeconomic outlook.
Arif Habib Limited (AHL) described the session as constructive and predicted the index could continue its upward trajectory toward the 168,000–170,000 range if positive momentum persists. Out of 485 companies traded during the session, 289 advanced, 156 declined, and 40 remained unchanged. Market activity remained robust, with the KSE All-Share Index witnessing a total trading volume of 1.47 billion shares, reflecting heightened investor participation. K-Electric led the volume chart with 229.8 million shares traded, closing at Rs6.99, down by Rs0.39.
In corporate developments, Attock Petroleum signed a Memorandum of Understanding with Huawei Technologies Pakistan and AE Power to establish electric vehicle (EV) charging stations across the country, signaling a move toward cleaner energy and sustainable mobility.
Market observers suggest that improving external balances, strong banking sector performance, and increasing technology exports are laying the groundwork for continued market resilience. With geopolitical tensions easing and key macroeconomic indicators strengthening, investor confidence appears poised for a sustained recovery.
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