KARACHI/PAKISTAN: The Pakistan Stock Exchange (PSX) on Thursday soared to a record-breaking level as the market responded with overwhelming optimism to the recently signed Strategic Mutual Defence Agreement (SMDA) between Pakistan and Saudi Arabia. The KSE-100 Index surged by 1,775.65 points or 1.14%, closing at an unprecedented 157,953.47 points.
The agreement, which declares that aggression against one signatory will be treated as aggression against both nations, has triggered a strong wave of investor confidence. Market watchers observed that despite ongoing economic challenges, including a weak current account and inflationary pressures, the deal has created fresh hope of stability and future investment flows.
Leading the rally were heavyweight blue-chip stocks, with Engro Holdings, National Bank of Pakistan, Mari Petroleum, United Bank Ltd, and Bank of Punjab contributing a combined 733 points to the index. Trading activity surged significantly as over 2 billion shares changed hands, with the total value recorded at Rs 56.9 billion, signaling renewed strength in investor appetite.
Adding further fuel to the rally, the U.S. Federal Reserve’s decision to cut interest rates by 25 basis points—along with prospects of further easing—strengthened sentiment across emerging markets, giving Pakistan’s bourse an additional lift.
Domestically, the government’s successful effort to raise Rs 195 billion through Treasury bill auctions—surpassing its Rs 175 billion target—while rejecting high-yield bids in Pakistan Investment Bonds (PIBs), was also seen as a signal of improved fiscal management and liquidity support.
Market experts, however, caution that the sustainability of this bullish trend will depend on how effectively the government leverages the Saudi pact into tangible economic benefits, ensures macroeconomic stability, and guards against external risks such as currency volatility and global inflationary pressures.
This story has been reported by PakTribune. All rights reserved.