The Pakistan Stock Exchange (PSX) experienced a volatile trading session on Thursday, with early optimism overshadowed by late-session profit-taking that ultimately pulled the market into negative territory. The benchmark KSE-100 Index, which had shown promising upward movement during morning hours, ended the day with a decline of 259.56 points, or 0.21%, settling at 124,093.12.
The day began on a high note for investors, as the index surged to an intraday peak of 126,718.28, driven by sustained post-budget enthusiasm and positive market sentiment. However, the momentum could not hold as the trading session wore on. Selling pressure intensified in the latter half of the day, dragging the index to an intraday low of 123,846.55, effectively wiping out the earlier gains.
This reversal came just a day after the market posted a significant rally. On Wednesday, the PSX saw strong participation from investors, with the KSE-100 Index gaining a robust 2,328 points or 1.91%, closing at 124,352.68. The surge followed investor optimism surrounding the federal budget for 2025–26, which projected a GDP growth rate of 4.2% against 2.7% in the outgoing year and set a total outlay of Rs17.573 trillion.
However, Finance Minister Muhammad Aurangzeb’s remarks at the post-budget conference on Wednesday injected a note of caution. He warned that the government might be forced to implement additional revenue measures of up to Rs500 billion in the next fiscal year if legislative support for enforcement mechanisms failed to materialize. He also noted that budget figures had already been locked in with the International Monetary Fund (IMF), further reinforcing the perception of rigid fiscal targets ahead.
Global market conditions also added to the cautious mood. Internationally, investors were adjusting to a softer U.S. inflation report and continued uncertainty in the geopolitical arena, particularly tensions in the Middle East and fragile trade relations between the United States and China. Stock indices across Asia and global futures markets saw declines as risk appetite waned.
MSCI’s broad index of Asia-Pacific shares outside Japan slipped 0.3% in early trading after reaching a three-year high a day earlier. Japan’s Nikkei fell by 0.7%, and China’s blue-chip index retreated by 0.37%. Meanwhile, Hong Kong’s Hang Seng Index dropped 0.74%, following its three-month high recorded on Wednesday. Investors remained wary of U.S. policy unpredictability, particularly former President Donald Trump’s ongoing influence on tariff discussions and trade policy, which have unsettled global markets throughout the year.
Within this broader context, Thursday’s movement on the PSX reflects both localized reactions to Pakistan’s fiscal policies and the influence of global financial headwinds. While the budget announcements have triggered a degree of domestic optimism, lingering uncertainties around enforcement, fiscal space, and global economic stability continue to keep traders on edge.
The day’s outcome is a reminder of the volatility that can accompany periods of transition and policymaking, especially in interconnected global markets. Investors and analysts alike are now watching closely for signals on interest rates, enforcement legislation, and international developments to gauge the near-term direction of the PSX.