The Pakistan Stock Exchange (PSX) surged to a new peak on Wednesday, driven by the positive sentiment surrounding the ongoing Shanghai Cooperation Organisation (SCO) summit in Islamabad. The KSE-100 index climbed by 673 points, reaching an intraday high of 86,513 points, building on the momentum from the previous day’s close of 85,840.
Investor confidence was bolstered by the smooth progression of the SCO summit, which gathered regional leaders, including Indian Foreign Minister Subrahmanyam Jaishankar—a significant diplomatic development amid long-standing tensions between Pakistan and India. Khurram Schehzad, CEO of Alpha Beta Core, noted that hosting such a major international event has likely strengthened investor optimism, signaling potential regional stability.
The market’s strong performance also coincided with the corporate earnings season, which has encouraged bullish investment activity. Saad Ali, Director of Research at Intermarket Securities, highlighted that investor sentiment improved due to progress on the government’s contentious bill and reduced likelihood of PTI protests.
Several other factors contributed to the rally, including reduced political uncertainty, declining bond yields, and discussions about the privatisation of state-owned enterprises. Analysts, such as Tahir Abbas from Arif Habib Ltd (AHL), also pointed to expectations of a significant interest rate cut by the central bank in November, which could further boost investor activity.
AHS’s Abbas forecast the rally to continue, with the market trading at an attractive price-to-earnings ratio of 4.2x, compared to its six-year average of 6x, suggesting significant room for growth. This sustained upward trend follows the IMF’s $7 billion bailout agreement, which has provided some stability to Pakistan’s struggling economy, although it remains contingent on sound policy implementation and ongoing financial support from international partners.
With optimism around corporate profitability and improved economic indicators, the PSX is expected to maintain its bullish trajectory.
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