PSX extends rally as bullish sentiment strengthens on economic optimism

• KSE-100 Index climbs 253 points, closing at 113,342.43.
• Strong buying lifts benchmark index to 114,029.75 peak.
• Lowest level of the session was recorded at 113,060.25.

The capital market continued its upward momentum on Wednesday, closing with modest gains amid strong foreign investment commitments, rising global crude oil prices, and expectations of further monetary easing by the State Bank of Pakistan (SBP).

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index rose by 253.96 points, or 0.22%, to close at 113,342.43, up from its previous close of 113,088.47. The index touched an intraday high of 114,029.75, while the lowest level of the session was recorded at 113,060.25.

"WB [World Bank] support for SOEs privatisation, pledge [of] over $40 billion investment, and WB praising government commitment to reforms triggered the bull run at PSX," said Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities.

Investor sentiment received a significant boost after Prime Minister Shehbaz Sharif welcomed a $40 billion investment from the World Bank on Monday, calling it a "new chapter" in Pakistan’s development.

The WB’s investment is divided into two key components: $20 billion for Pakistan’s private sector under the International Finance Corporation (IFC) and another $20 billion allocated for public sector development projects. These funds will support health, education, and youth development initiatives, as well as infrastructure improvements.

Meanwhile, Pakistan’s economic team prepares for the upcoming IMF review, scheduled for March 4, under the $7 billion Extended Fund Facility (EFF). The IMF Executive Board is expected to approve a $1 billion tranche by April 2025.

Pakistan has so far received $5.5 billion in foreign loans this fiscal year, including IMF disbursements, but the amount remains far below the projected inflows of $19 billion for FY25.

Pakistan’s information technology (IT) sector has shown robust performance, posting $313 million in exports for January 2025, reflecting an 18% year-on-year increase.

While monthly exports declined by 10% compared to December 2024, January's figure remains higher than the 12-month average of $303 million, making it the 16th consecutive month of year-on-year growth since October 2023.

Cumulatively, IT exports for the first seven months of FY25 (July–January) have surged 27% YoY, reaching $2.18 billion.

“Surging global crude oil prices, robust data on export, upbeat earnings in fertilizer, cement and banking sectors and expectations for further SBP policy easing amid thin inflation played a catalyst role in the bullish run,” noted Mehanti.

The cement sector remained a top contributor, benefiting from lower coal prices and infrastructure development projects. The banking sector also saw strong gains, ahead of earnings announcements from commercial banks.

The PSX had staged a sharp recovery on Tuesday, snapping a four-session losing streak as investors took advantage of attractive stock valuations and sector-specific gains.

The KSE-100 Index surged by 1,344.95 points, or 1.2%, to close at 113,088.48 on Tuesday, after touching an intraday high of 113,252.55.