The Pakistan Stock Exchange’s benchmark KSE-100 index achieved a new historic milestone on Wednesday, soaring to an unprecedented level of 124,352 points. This significant gain followed the federal government’s announcement of the fiscal year 2025-26 budget, which was met with widespread investor optimism and strong buying momentum across the board.
The KSE-100 surged by 2,328 points, marking a 1.91% increase from the previous day’s close of 122,044. This rally is being seen as a clear vote of confidence from the market, reflecting investor approval of the government’s fiscal strategy and economic outlook for the upcoming year.
Buying activity was observed in nearly all major sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration, oil marketing companies, and power generation. The bullish sentiment was further reinforced by gains in index-heavy blue-chip companies. Stocks such as HUBCO, PSO, WAFI, MARI, OGDC, PPL, POL, HBL, MCB, MEBL, and UBL contributed significantly to the index’s upward momentum, highlighting broad-based enthusiasm across industries.
Market analysts attributed the strong performance to the government’s decision to avoid imposing additional tax burdens on capital markets. Notably, the retention of the 15% capital gains tax on dividends was perceived positively, helping sustain institutional and retail investor interest. The lack of disruptive fiscal measures helped maintain market stability and encouraged continued engagement in equity markets.
Prime Minister Shehbaz Sharif commented on the positive market response, emphasizing that the stock market’s performance is a reflection of the business community’s trust in the newly unveiled budget. “The strong performance of the stock market reflects the business community’s trust in our people-centric budget,” he said in an official statement.
Finance Minister Muhammad Aurangzeb presented the federal budget for FY2025-26 in the National Assembly on Tuesday, outlining a comprehensive fiscal plan with a total outlay of Rs17.573 trillion. The budget aims to stimulate economic growth, setting a target GDP growth rate of 4.2%—a substantial increase from the 2.7% estimated for the current fiscal year.
The budget also sets key macroeconomic goals, including reducing inflation to 7.5%, decreasing the fiscal deficit to 3.9% of GDP (equivalent to Rs5,037 billion), and achieving a primary surplus of 2.4% of GDP. Aurangzeb characterized the budget as the beginning of a longer-term transformation aimed at enhancing the country’s economic competitiveness and strengthening its export base.
As confidence in the FY26 budget continues to grow, market experts anticipate that the KSE-100 index could maintain its upward trajectory in the short to medium term, driven by policy clarity, investor optimism, and improving macroeconomic indicators.