PSX surges as banking, cement and energy sectors drive rally

The stock market staged a strong recovery on Tuesday, as investors shifted focus to buying after weeks of selling pressure.

Market momentum was largely fuelled by strong earnings reports from major banks and optimism surrounding continued energy sector reforms, with investors anticipating further positive results from commercial banks. 

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index surged by 1,344.94 points, or 1.2%, to close at 113,088.47. The market touched an intraday high of 113,252.54 and a low of 111,642.02, reflecting strong investor confidence across multiple sectors.

"Market rally was driven partly by strong results from certain large banks and an optimism about continued energy sector reforms driving stocks in that space,” said Muhammad Saad Ali, Director of Research at Intermarket Securities Ltd.

“The market is also anticipating strong results from other large banks. Cement sector stocks are also among top point contributors,” he added, highlighting the sector-wise gains in the market.

Finance Minister Muhammad Aurangzeb, in an interview with Arab News on Monday, underscored Pakistan’s improving macroeconomic stability and its efforts to implement structural reforms.

“Pakistan and the Kingdom of Saudi Arabia have been long-standing partners, one of the strongest partnerships that we have,” he said, adding that Pakistan aims to learn from Saudi Arabia’s Vision 2030 as it embarks on its own economic transformation.

He also highlighted Pakistan’s improved debt-to-GDP ratio, which has fallen from over 73% to the mid-60s, and reaffirmed the government’s commitment to export-led growth.

“Pakistan will have to fundamentally change the DNA of the economy,” he stated, emphasising that the International Monetary Fund (IMF) supports the country’s economic trajectory.

Pakistan’s textile exports surged by 15.85% year-on-year in January 2025, reaching $1.686 billion, compared to $1.477 billion a year earlier.

For the first seven months of FY25 (July-January), total textile exports rose 10.6% to $10.77 billion, up from $9.74 billion in the same period last year.

Meanwhile, the cement sector benefitted from a decline in coal prices, which improved profit margins and led to renewed buying interest. The banking sector also saw gains, with investors drawn to strong dividend payouts and solid earnings reports.