PSX at new peak as budget sparks optimism

Bulls roared back to the Pakistan Stock Exchange (PSX) on Wednesday as investor appetite grew that propelled the KSE-100 index higher by 2,328 points to an all-time high above 124k.

The rally was fuelled by the announcement of federal budget, which maintained status quo on equity taxation and signalled economic recovery. Market players welcomed the avoidance of a major tax burden on capital markets and viewed the increase in withholding tax on bank deposits as a measure that would shift investment to stocks.

Arif Habib Corp MD Ahsan Mehanti observed that stocks reached a new all-time high, led by across-the-board activity, as investors cheered the status quo on equity taxes and higher withholding taxes on bank deposits in the FY26 budget.

IMF-driven projections of a 3.9% fiscal deficit, low current account deficit, 4.2% GDP growth, Rs86.5 billion in privatisation proceeds and Rs1 trillion federal PSDP drove the bullish momentum, he added.

At the end of trading, the benchmark KSE-100 index displayed a surge of 2,328.24 points, or 1.91%, and settled at 124,352.68.

JS Global analyst Mubashir Anis Naviwala said that the stock market welcomed the budget with strong optimism, breaking all resistance levels to cross the 124,000 mark. A new historic intra-day high of 124,588 was reached before the index settled at 124,353, up 2,328 points.

The rally was driven by broad-based participation, reflecting growing investor confidence. He recommended investors to accumulate stocks on dips in fertiliser, cement and banking sectors.

Arif Habib Limited (AHL) Deputy Head of Trading Ali Najib wrote that the bourse acknowledged the FY26 budget with optimism. Investors viewed the budget as "neutral to positive", particularly in light of its alignment with fiscal prudence and IMF reform commitments, he said.

Najib pointed out that investor sentiment turned decidedly bullish as the budget did not incorporate new taxes or levies. The continuation of subsidies for key sectors and enhanced clarity on the government's economic direction further boosted market confidence.

KTrade Securities, in its report, said that the stock exchange responded positively to the budget, which was seen as supportive for capital markets. Key contribution to the index came from cement, oil and gas, banking and fertiliser sectors, with notable gains in Lucky Cement, Fauji Fertiliser, Pakistan Petroleum, Engro Holdings, Mari Petroleum, Pakgen Power and OGDC.

It anticipated continued upward momentum in the current week, driven by investor optimism around the budget and positioning ahead of potential economic tailwinds.

Overall trading volumes increased to 1.04 billion shares compared with Tuesday's tally of 593 million. The value of shares traded was Rs46.7 billion. Shares of 478 companies were traded. Of these, 283 stocks closed higher, 157 fell and 38 remained unchanged.

Pervez Ahmed Consultancy was the volume leader with trading in 78.3 million shares, rising Rs0.49 to close at Rs2. It was followed by WorldCall Telecom with 55.1 million shares, gaining Rs0.03 to close at Rs1.45 and Sui Southern Gas Company with 45.1 million shares, rising Rs3.74 to close at Rs41.14. Foreign investors sold shares worth Rs1.1 billion, the National Clearing Company reported.