The Pakistan Stock Exchange (PSX) experienced late-session volatility on Tuesday, as early gains driven by investor optimism gave way to profit-taking, trimming the market’s advances. Despite the mid-session selling pressure, the KSE-100 Index managed to close in positive territory with moderate gains.
Market Performance
- The KSE-100 Index gained 197.98 points (0.17%), closing at 114,528.08.
- The index hit an intraday high of 115,889.60 before settling lower due to investor caution.
- Profit-taking set in mid-session, limiting the rally sparked by optimism over fiscal incentives in the upcoming federal budget and hopes for an expanded IMF loan program.
Expert Insights
Ahfaz Mustafa, CEO of Ismail Iqbal Securities, noted:
“The euphoria from yesterday’s move subsided as fund buying started to taper off and sellers regained momentum. The market will likely remain range-bound until there are new developments on the IMF and circular debt front.”
Meanwhile, IMF negotiations gained traction, with its technical team on climate finance meeting Pakistani authorities to discuss a potential carbon levy in the upcoming budget. The discussions are part of Pakistan’s efforts to secure an additional $1.2 to $1.5 billion under the Resilience and Sustainability Facility (RSF), supplementing the existing $7 billion Extended Fund Facility (EFF).
If finalized, Pakistan’s total IMF funding could rise to between $8.2 billion and $8.5 billion.
Drivers Behind Early Gains
Ahsan Mehanti, Managing Director of Arif Habib Commodities, highlighted key factors fueling the early market rally:
- Pre-budget optimism, with investors anticipating a construction package.
- Strong economic indicators, including higher remittances, lower inflation, and stable forex reserves.
- IMF’s potential approval of $1 billion in climate funding.
- Rising global crude oil prices and ongoing discussions on the privatization of state-owned enterprises (SOEs).
Government’s Economic Outlook
Finance Minister Aurangzeb reiterated the government’s commitment to economic stability, emphasizing:
- Expansion of the tax base and growth in foreign exchange reserves.
- Support for the construction industry, while curbing speculative activities in real estate.
- Roshan Digital Account (RDA) inflows and 35 million remittance senders boosting economic activity.
Speaking in Faisalabad, he stressed that structural reforms are strengthening the economy, citing:
- Lower policy rates.
- Single-digit inflation.
- Rising tax revenues as signs of stabilization.
Outlook for PSX
The benchmark index closed at 114,330.10 points on Monday, gaining 1,529.17 points (1.36%) after hitting a low of 111,857.34 earlier in the session.
With profit-taking slowing momentum, analysts expect the PSX to remain range-bound in the near term. Future market direction will depend on IMF negotiations, circular debt resolution, and fiscal incentives in the budget.
