PSX jumps after budget as easing oil fears lift investor sentiment

KARACHI: The Pakistan Stock Exchange staged a strong rebound on Monday in the first trading session after the federal budget for 2026-27, with broad-based buying lifting the benchmark KSE-100 index above the 177,000-point mark.

The KSE-100 index closed at 177,039 points after gaining 4,639 points, or 2.69 per cent. Sentiment remained positive as investors responded favourably to the government’s reform-oriented budget steps and to reports of a preliminary peace agreement between the United States and Iran, which eased concerns about disruption to global oil supplies.

The reported diplomatic progress between Washington and Tehran also pushed global oil prices lower, taking them to an almost three-month low. Hopes for the reopening of the Strait of Hormuz reduced supply concerns and eased inflation worries for oil-importing countries such as Pakistan. Petroleum prices in Pakistan had risen sharply after the outbreak of the US-Israeli war with Iran on Feb 28. Pakistani leaders reportedly played a diplomatic role in mediation efforts between the two sides.

Budget measures and rate decision support market

Major support for the rally came from United Bank, Hub Power, Lucky Cement, Engro Holdings and Fauji Fertiliser Company, which together contributed 1,790 points to the index’s advance. Expectations of a formal signing of the US-Iran understanding in Geneva later this week further improved risk appetite and encouraged buying across the market.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said the market opened the week with exceptionally strong sentiment after the FY27 budget introduced measures seen as supportive for the market. He said a cut in super tax for selected sectors had materially improved the earnings outlook for companies.

He also said the State Bank of Pakistan’s decision to keep the policy rate unchanged at 11.5pc in its Monetary Policy Committee meeting was in line with market expectations and added further support to confidence.

Trading volumes rise sharply

Market activity remained robust during the session. Traded volume increased 10.92pc to 980.5 million shares, while turnover climbed 51.18pc to Rs63.4 billion. Kohinoor Spinning Mills led the volume table with 64.1 million shares traded.

Analysts said the market could continue moving towards its record closing level of more than 189,000 points, backed by the FY27 budget, the central bank’s decision to maintain the policy rate and improving prospects for a US-Iran peace agreement. They added that investors were still expected to keep an eye on implementation risks and international developments.