KARACHI; Pakistan’s equity market extended its rally on Tuesday, with the benchmark index trading solidly in positive territory as institutional buying and upbeat investor sentiment kept momentum strong.
“Investments from mutual funds are driving the market forward, supported by strong corporate results, improving US relations, and macroeconomic re-rating. Some optimism is also linked to progress on circular debt resolution,” said independent investment and economic analyst AAH Soomro.
The Pakistan Stock Exchange’s (PSX) KSE-100 Index climbed to an intraday high of 147,976.98 points, up 1,047.14 points, or 0.71%, from Monday’s close of 146,929.84. The session’s low was recorded at 147,309.18 points, still higher by 379.34 points, or 0.26%.
“Stocks closed near a fresh all-time high on the back of robust financial results and speculation about positive developments in the final details of US investments under the Pakistan-US trade deal,” said Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities.
He added that record July 2025 remittances of $3.2 billion, rupee stability, and expectations of a boost in exports amid the India-US tariff dispute also contributed to the bullish momentum.
Bloomberg, citing State Finance Minister Bilal Azhar Kayani, reported that Pakistan and the US are in the final phase of negotiations to finalise the trade agreement, which includes investment inflows. The government is pushing for improved tariff concessions on select exports, building on last month’s 19% tariff reduction that followed a warming of ties between Islamabad and Washington.
On the domestic front, the government has accelerated power sector reforms, reducing circular debt by Rs780 billion to Rs1.6 trillion. The National Assembly was informed that as of May 2025, total circular debt stood at Rs2.47 trillion, with Rs1,275 billion arranged through a six-year loan at three-month KIBOR minus 0.9%, to be serviced via the existing Debt Service Surcharge (DSS) on electricity bills.
Measures to curb future accumulation include tariff renegotiations with Independent Power Producers (IPPs), privatisation of four distribution companies, improvements in efficiency to reduce technical losses, and prioritising least-cost capacity additions.
Business confidence has reached its highest level in nearly four years, according to Gallup Pakistan’s Q2 2025 Business Confidence Survey. The ‘Direction of the Country Score’ improved to -2% from sharply negative levels in late 2024, with 46% of respondents rating the current government’s economic management better than the previous administration’s, compared to 24% a year earlier.
On Monday, the KSE-100 Index had already surged by 1,547.05 points, or 1.06%, closing at 146,929.84 points from 145,382.8 in the prior session. The day’s peak stood at 147,005.18 points, while the low was recorded at 145,258.50 points.
