The Pakistan Stock Exchange (PSX) sustained its bullish streak in the outgoing week, with the benchmark KSE-100 index surging to an all-time high of 121,798 points on June 4, before settling at 121,641, marking a weekly gain of 1,950 points (+1.63%).
The rally was fueled by renewed investor confidence following successful budget talks with the International Monetary Fund (IMF), the Asian Development Bank's (ADB) approval of a $800 million financing package and the government's finalisation of a Rs1.275 trillion circular debt resolution deal with banks – a significant development for the energy sector.
Macroeconomic indicators further supported sentiment as petroleum sales jumped 10% year-on-year (YoY) in May 2025, the Consumer Price Index (CPI)-based inflation eased to 3.5% and the trade deficit narrowed 23% month-on-month (MoM). However, the State Bank's reserves dipped slightly by $7 million, settling at $11.5 billion.
On a day-on-day basis, the PSX attempted once again on Monday to decisively breach the key psychological barrier of 120,000 at close but fell short, ending the session at 118,878, reflecting a decline of 813 points. It came due to profit-taking pressure at record levels.
On Tuesday, the market soared to an all-time high above 120,000 points as investor optimism grew following the approval of a $800 million loan by the ADB for Pakistan's public finance programme and the government's approval of a Rs880 billion Public Sector Development Programme (PSDP). The benchmark KSE-100 index recorded an increase of 1,573 points and settled at 120,451.
The bourse continued its record-breaking run on Wednesday, with the index closing at an all-time high of 121,799, up 1,348 points. Investor sentiment remained upbeat ahead of the federal budget, buoyed by expectations of fiscal relief measures and encouraging macroeconomic indicators.
However, the PSX witnessed a volatile session on Thursday, with the benchmark index retreating after hitting record highs a day earlier. Investor sentiment turned cautious due to concerns about stringent conditions linked to a new IMF programme, including the proposed enforcement of agriculture income tax and the IMF's opposition to provincial energy subsidies. The PSX ended the day on a negative note at 121,641, down 158 points.
"Building on last week's bullish trend, the market picked up pace, with the KSE-100 reaching an all-time high of 121,798 points on June 4, driven by buying interest across different sectors," Arif Habib Limited (AHL) wrote in its weekly report.
Positive sentiment followed Pakistan's successful budget talks with the IMF, alongside the ADB's approval of a $800 million financing package. The government also finalised a Rs1.275 trillion circular debt resolution deal with banks, a significant move for the power sector, AHL said.
Meanwhile, during May 2025, petroleum sales rose 10% YoY, inflation came in at 3.5% and the trade deficit narrowed 23% MoM. The State Bank's reserves declined $7 million to $11.5 billion.
The market closed at 121,641, depicting a surge of 1,950 points, or 1.63% week-on-week (WoW).
Sector-wise, the positive contribution came from commercial banks (1,044 points), power generation and distribution (369 points), fertiliser (206 points), food and personal care products (95 points) and chemicals (60 points). Meanwhile, the sectors that contributed negatively were technology and communication (82 points), automobile assemblers (29 points), miscellaneous (24 points), cable and electrical goods (10 points) and Real Estate Investment Trusts (five points).
Scrip-wise, the positive contributors were Pakgen Power (327 points), Bank AL Habib (208 points), NBP (165 points), HBL (160 points) and Fauji Fertiliser Company (158 points). Foreigners' selling was witnessed during the week, which came in at $14.7 million compared to net selling of $5.56 million last week. Average volumes arrived at 660 million shares (-0.2% WoW) while average traded value settled at $98.6 million (up 24.9%), AHL added.
Syed Danyal Hussain of JS Global wrote that the KSE-100 index hit an all-time high during the outgoing week, closing at a record level of 121,641 points, up 1.6% WoW.
The rally was largely driven by optimism surrounding a potential agreement with the IMF, as indicated by the prime minister, which spurred pre-budget sentiment, he said. The government, following the IMF's endorsement, finalised a Rs1.275 trillion financing agreement with 18 commercial banks to address the power sector's circular debt.
On the sectoral front, local cement dispatches rose 9% YoY in May 2025, bringing 11MFY25 volumes to nearly flat levels. Meanwhile, a 26% rise in exports during 11MFY25 lifted total cement sales to a growth of 2%, he added.
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