ISLAMABAD – The Pakistan Stock Exchange (PSX) extended its gains on Wednesday, with the benchmark KSE-100 Index surging more than 3,700 points as lower-than-expected inflation data strengthened expectations of monetary easing.
The KSE-100 Index gained 3,748.40 points, or 2.08 per cent, to close at 184,050.10 on the first trading day of the new fiscal year.
The benchmark remained in positive territory throughout the session after opening higher, climbing steadily from an intraday low of 180,565.83 recorded shortly after the market opened.
The rally followed Tuesday’s strong recovery, which pushed the index above the 180,000-point mark and helped the market end FY2025-26 on a robust note.
Awais Ashraf, director of research at AKD Securities, attributed the renewed buying interest to June’s inflation reading, which came in below market expectations.
According to data released by the Pakistan Bureau of Statistics, the consumer price index (CPI) rose 11.1pc year-on-year in June, easing from 11.7pc in May and remaining within the government’s projected range of 11pc to 12pc.
On a month-on-month basis, CPI declined 0.3pc in June, compared with a 0.5pc increase in May.
Ashraf said the latest inflation figures reinforced expectations that price pressures were continuing to ease, improving the outlook for interest rate cuts.
He added that investor sentiment had also been supported by expectations that inflation would remain within the State Bank of Pakistan’s target range during FY2026-27, aided by lower international oil prices following the temporary easing of tensions between the United States and Iran.
The gains came after the market had fallen more than 1,100 points on Monday amid heightened geopolitical tensions following the exchange of military strikes between the United States and Iran.
The outgoing fiscal year marked a strong performance for the PSX, with the KSE-100 Index posting a 44pc return in rupee terms and 46pc in dollar terms, rising from 125,627 points at the end of FY2024-25 to 180,302.
Market analysts expect the benchmark index to continue its upward trajectory towards the 189,000-point level, supported by easing inflation, lower oil prices and expectations of further monetary easing, although inflation trends, monetary policy decisions and geopolitical developments are likely to remain key drivers of investor sentiment.
