The Pakistan Stock Exchange (PSX) continued its record-breaking streak on Wednesday, as the benchmark KSE-100 Index surged past the 130,000-point milestone for the first time in history. The index closed at 130,344.03 points, marking a sharp gain of 2,144.61 points or 1.67% from the previous close.
During the day, the index touched an intraday high of 130,545.94 — a rise of 2,346.52 points or 1.83% — before settling slightly below that mark. Even the session’s low point stood strong at 128,616.11, up by 416.69 points or 0.33%, underscoring bullish investor sentiment.
Analysts credited the rally to multiple positive indicators, including easing inflation, hopes of further monetary easing, and government support to the industrial sector. “Stocks trading at new all-time high amid upbeat data on CPI inflation at 3.2% YoY for June ’25 and government projections for surging exports and inflation at 5–7% in FY26,” said Ahsan Mehanti, CEO of Arif Habib Commodities.
Inflation Dips Sharply, Fueling Interest Rate Cut Hopes
The market rally gained momentum after official inflation data revealed a substantial decline in consumer prices. Pakistan’s headline inflation dropped to just 3.23% in June 2025, driven by falling food and utility prices. It marks the lowest level in years and supports growing speculation that the State Bank of Pakistan (SBP) could deliver another rate cut soon.
For FY2024-25, average annual inflation was recorded at 4.49% — the lowest in nearly a decade. This follows a sharp drop in SBP’s policy rate from a peak of 22% to 11%, giving businesses and investors room to breathe.
Food inflation continued its downward trend, clocking in at 2.56% in June, compared to 3.07% in May. Even more notably, perishable food items remained in deflation for the sixth consecutive month, dropping by 10.55% year-on-year in June.
Lower inflation means cheaper borrowing, which directly benefits listed companies through reduced financing costs and improved profit margins — a key factor in driving investor confidence.
Energy Sector Relief, Global Oil Prices Add to Rally
Alongside macroeconomic improvements, government policy also played a crucial role in Wednesday’s bullish performance. The removal of extra duties on industrial power tariffs was welcomed by investors, especially those in the manufacturing and export-oriented sectors.
“Government abolishment of ED on industrial power tariff and surging global crude oil prices played catalyst role in bullish activity at PSX,” noted Mehanti.
The energy and industrial sectors led the charge on the index, while investor optimism also surged due to expectations of higher exports in the coming fiscal year.
On Tuesday, the KSE-100 Index had already set the tone for the week, gaining 2,572.11 points to close at 128,199.42 — up from 125,627.31 a day earlier. That session also witnessed a strong high of 128,475.69, showing the market’s solid upward trajectory as FY2025-26 kicks off.
With inflation under control, energy sector relief, and economic stability gaining ground, investors appear increasingly optimistic about Pakistan’s financial future.
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