The Pakistan Stock Exchange (PSX) witnessed a strong rally on Thursday, driven by optimism over the resolution of circular debt in the energy sector and an upgrade in Pakistani banks’ outlook by Moody’s Ratings. Investor sentiment was further bolstered by hopes of a favorable outcome from the ongoing International Monetary Fund (IMF) review.
The KSE-100 Index surged 1,009.70 points (0.89%), closing at 115,094.23 points, continuing its upward trajectory. The index peaked at 115,247.39, with buying momentum fueled by positive economic indicators.
Key Market Drivers:
- Energy Sector Boost: Investors reacted positively to potential solutions for circular debt.
- Moody’s Upgrade: The rating agency revised its banking sector outlook to positive, citing improving macroeconomic conditions and resilience in financial performance.
- IMF Review Optimism: Ongoing discussions with the IMF over the $7 billion Extended Fund Facility (EFF) added to market confidence.
Moody’s noted that Pakistan’s economy is expected to grow by 3% in 2025, following 2.5% in 2024 and a 0.2% contraction in 2023.
Meanwhile, workers’ remittances surged 38.6% year-on-year to $3.1 billion in February 2025, with total inflows reaching $24 billion in the first eight months of FY25, reflecting a 32.5% rise. Analysts credit the rupee’s stability, economic recovery, and SBP’s crackdown on illegal foreign exchange trading for the increase.
The IMF’s review led by Mission Chief Nathan Porter is expected to unlock a $1 billion loan tranche, further supporting economic stability.
The rally followed a mixed session on Wednesday, where the KSE-100 Index dipped 93.12 points (0.08%) to 114,084.54 points. However, the strong rebound on Thursday indicates renewed investor confidence.
