The Pakistan Stock Exchange (PSX) continued its upward momentum on Tuesday as the benchmark KSE-100 Index surged to an intraday high of 179,986.90 points, gaining 2,947.08 points, or 1.66%, driven by monetary policy stability, easing global oil prices and optimism over improving geopolitical conditions.
Investor sentiment remained strong after the State Bank of Pakistan (SBP) maintained its policy rate at 11.5%, a move widely interpreted by market participants as a signal of continuity in monetary policy. Traders said the decision helped reinforce expectations of controlled inflation and financial stability in the coming months.
During the session, the index fluctuated between gains and minor pullbacks, reflecting intraday volatility. At its lowest level, the KSE-100 stood at 177,741.46 points, still up 701.64 points, or 0.4%, before recovering strongly on renewed buying interest.
Market analysts linked the bullish trend to a combination of domestic and global factors. Falling international crude oil prices provided additional support, easing concerns over import costs and inflationary pressure in Pakistan’s economy. Sentiment was also lifted by reports of a US-Iran interim understanding aimed at reducing tensions and reopening key maritime routes, including the Strait of Hormuz.
The SBP noted in its monetary policy statement that inflation had risen to double digits in recent months due to energy price shocks linked to regional conflict, but it expects price pressures to gradually ease. However, it cautioned that risks remain, including geopolitical uncertainty, fiscal adjustments and volatile food prices.
Meanwhile, global equities mostly traded higher, while oil prices extended losses as markets assessed the potential impact of renewed supply flows through key shipping lanes. Brent crude and US West Texas Intermediate both posted marginal declines in early trading.
Adding to the positive sentiment, the Pakistan Stock Brokers Association described the federal budget for FY2026-27 as investor-friendly, citing the government’s decision to maintain the existing tax structure for equities and avoid new levies on market participants.
With macroeconomic indicators showing signs of gradual stabilisation, analysts expect continued volatility but a broadly positive outlook for Pakistan’s equity market in the near term.