The Pakistan Stock Exchange (PSX) opened the new trading week on a bullish note, with the benchmark KSE-100 Index rallying sharply during the early hours of Monday’s session. By 10:25am, the index had risen by 662.08 points, or 0.54 percent, reaching the level of 122,805.64. The upbeat momentum was underpinned by renewed investor interest across a range of key sectors and a more favorable perception of fiscal measures announced in the federal budget.
Investor focus was notably directed towards major segments including automobile assembly, commercial banking, oil and gas exploration, oil marketing, and power generation. Heavyweight stocks such as HUBCO, MARI, OGDC, PPL, POL, FFC, UBL, and MCB were all trading in positive territory, helping lift overall market sentiment. This sectoral enthusiasm reflected renewed confidence following the government’s decision to avoid market-disruptive policies in the FY26 budget.
The positive opening comes after a volatile week for the PSX, where early optimism was dented by escalating geopolitical concerns. While the benchmark index saw early gains last week due to the anticipated monetary easing and budget clarity, profit-taking emerged in later sessions as tensions between Iran and Israel escalated. Despite the choppiness, the KSE-100 Index still managed to close the week at 122,144 points, marking a net weekly gain of 502 points, or 0.4 percent.
Much of last week’s optimism was driven by the unveiling of the Rs17.3 trillion federal budget for the fiscal year 2025–26. Market participants welcomed the absence of any punitive capital market taxes. More importantly, the Capital Gains Tax (CGT) structure came out more favorable than expected, boosting institutional sentiment and encouraging mutual funds to increase their equity positions.
Beyond domestic developments, international market sentiment also played a role in shaping early trade direction. Asian equities were largely steady despite the ongoing Middle East conflict. Oil prices climbed again on Monday, adding another 1 percent to last week’s 13 percent spike. The sustained rise in oil, however, contributed to inflation concerns globally and reinforced the likelihood that the US Federal Reserve may delay interest rate cuts.
The broader global markets showed relative calm despite the geopolitical backdrop. Currency markets remained stable, and futures for Wall Street’s S&P 500 and Nasdaq recovered from early declines to post slight gains of 0.1 percent and 0.2 percent, respectively. In Asia, Japan’s Nikkei rose by 0.8 percent, South Korea’s stock market climbed 0.5 percent, and China’s blue-chip index edged up 0.1 percent following stronger-than-expected retail sales data.
Market watchers remain cautious, as central banks, including the Federal Reserve, prepare for key policy meetings later this week. While futures markets still price in the possibility of two rate cuts by the end of the year, expectations for immediate easing have tempered, especially in light of fresh inflationary signals from rising commodity prices.
Back at home, the PSX’s early morning gains indicate that despite global headwinds, local investor sentiment remains anchored by stable domestic policy signals and a more welcoming fiscal environment. With corporate earnings season approaching and geopolitical risks still unfolding, market participants are expected to remain selectively active while awaiting further clarity.