The Pakistan Stock Exchange (PSX) experienced a strong rally on Thursday after the announcement of a major trade agreement between Pakistan and the United States. Investors responded positively, pushing the benchmark KSE-100 Index to an intraday high of 140,077.85, gaining 1,618.96 points or 1.17% from the previous close. The index also recorded a low of 139,369.06, which was still 956.81 points higher, reflecting overall bullish momentum in the market.
Market experts linked the positive trend to the diplomatic and economic breakthrough that has boosted investor confidence. Independent analyst AAH Soomro called the US trade deal a “diplomatic success,” especially at a time when India is facing higher tariffs on exports. He added that stronger ties with the US could promote long-term economic stability under IMF-backed reforms, further strengthening Pakistan’s financial outlook.
The agreement was finalized during a high-level meeting between Pakistan’s Finance Minister Muhammad Aurangzeb and US officials, including the Secretary of Commerce and the US Trade Representative. Also present were Pakistan’s Ambassador to the US Rizwan Saeed Sheikh and Commerce Secretary Jawad Paul. The Ministry of Finance stated that the deal aims to increase trade, improve market access, attract investment, and boost cooperation in energy, IT, and cryptocurrency sectors.
The trade agreement includes reduced tariffs on Pakistani exports and incentives for US investment in Pakistan’s infrastructure. This development signals a new phase of economic cooperation, bringing hope for job creation and growth in key sectors. With the US showing confidence in Pakistan’s economy, local and foreign investors are expected to remain active in the coming days.
Adding to the upbeat mood, the State Bank of Pakistan (SBP) decided to keep the interest rate unchanged at 11% during its recent monetary policy meeting. While the central bank acknowledged inflation risks due to higher gas tariffs, it maintained that inflation would likely stay within the 5% to 7% range in FY26. SBP Governor Jameel Ahmad stated that a slight increase in the trade deficit may occur as economic activity improves.
The PSX had already shown signs of improvement earlier this week. On Wednesday, the KSE-100 Index gained 447.43 points, or 0.32%, to close at 138,412.25. The consistent upward trend, fueled by both policy continuity and positive global relations, suggests growing investor optimism. Analysts believe that with continued economic diplomacy, the stock market could sustain this momentum in the near term.