The Pakistan Stock Exchange (PSX) closed marginally lower on Thursday as investors exercised caution ahead of the federal budget announcement set for next week. On the final trading session before the Eid holidays, the benchmark KSE-100 index declined slightly, reflecting investor uncertainty surrounding the government’s fiscal direction for the upcoming financial year.
The KSE-100 index shed 158 points, representing a 0.10 percent decrease, and settled at 121,641 points by the close of the session. This slight dip follows a strong rally in recent days that saw the market edge close to its all-time high. Thursday’s modest pullback is seen as a typical pre-budget cooldown, with many investors opting to stay on the sidelines until more clarity emerges from the budget announcement.
Despite the decline in the index, market activity remained robust. A total of 854.6 million shares changed hands during the day, a notable increase from the 710.5 million shares traded during the previous session. However, the overall trading value declined, with share turnover recorded at Rs. 25.79 billion, compared to Rs. 35.21 billion on the prior trading day.
Out of 477 companies that participated in trading, 216 recorded gains, 208 witnessed declines, and 53 companies closed without any change in their share price. This balance suggests a mixed sentiment among investors, with pockets of optimism still present despite broader caution.
Market analysts attributed the subdued sentiment to budget-related uncertainties. As the government prepares to present the 2025 federal budget on June 10, investors are closely watching for potential changes in taxation, subsidy allocations, public sector development spending, and macroeconomic policy targets. Historically, pre-budget sessions tend to be volatile as traders weigh possible impacts on corporate earnings and overall economic direction.
Additionally, the timing of this market movement, just before the Eid holidays, contributed to the cautious stance. Many institutional and retail investors are likely deferring significant trading decisions until after the budget is unveiled and the market resumes activity. The PSX will reopen on June 10, the same day the government is scheduled to announce its budget, a session that could set the tone for market performance over the next quarter.
The broader economic backdrop also remains a critical variable. With ongoing negotiations with international financial institutions and efforts to meet fiscal targets, the upcoming budget is expected to contain both revenue-enhancing measures and reforms aimed at economic stabilization. Investors are particularly attentive to policies that may affect key sectors such as banking, energy, construction, and exports.
In the short term, volatility is expected to remain as market participants position themselves based on expectations from the budget speech. The coming days are likely to bring sharper market movements as investors adjust portfolios in light of new policy directions.
As the PSX takes a brief pause for the Eid holidays, all eyes are now on Islamabad, where the federal budget announcement will play a defining role in shaping investor confidence and the stock market trajectory for the second half of 2025.