PSX rises by nearly 1,600 points a day after federal budget is passed

Bulls regained control of the trading floor as shares at the Pakistan Stock Exchange (PSX) climbed nearly 1,600 points at the close of the first session on Friday, a day after the passage of the federal budget for the upcoming fiscal year.

The KSE-100 index climbed 1581.77 points, or 1.3 per cent, to stand at 123,628.23 at the close of the first session, from the last close of 122,046.46 points.

Awais Ashraf, director research at AKD Securities, said, “[The] passage of [the] federal budget with the absence of aggressive incremental revenue measures and slight relief for salaried and business is also well received by the investors.”

The National Assembly on Thursday passed the federal budget for the FY25-26, with an outlay of Rs17.57 trillion, despite opposition calls for the budgetary proposals to be made public and for the passage to be delayed until public input had been sought.

“The ceasefire between Iran and Israel has redirected investor focus toward improving macroeconomic fundamentals. Lower inflation and a record current account surplus are strengthening the case for a potential decline in interest rates to single digits,” Ashraf added.

He continued that stocks linked to the power sector and oil and gas exploration, along with those in their supply chains, are gaining momentum amid expectations of circular debt clearance before the fiscal year-end.

“We anticipate the market rally to sustain, supported by continued monetary easing, as inflation is projected to fall even below the FY25 estimate of 4.5pc in FY26,” he concluded.

Yesterday, the PSX had reversed its upward trajectory after two days of gains, as investors opted for profit-taking at elevated levels, dragging the benchmark index into the red.

Earlier in the week on Tuesday, shares climbed by 6,079.16 points in the wake of US President Donald Trump announcing a complete ceasefire between Israel and Iran to end a 12-day war.

The benchmark index experienced two days of gains, before reversing trends on Thursday.