The Pakistan Stock Exchange opened Friday on a strong footing, crossing the 179,000 mark for the first time and setting a new all-time intraday high as investor optimism gathered pace.
The benchmark KSE-100 Index surged to an intraday peak of 179,016.88 points, up 2,661.39 points, or 1.51 percent. During the session, the index touched a low of 176,709.51, still reflecting a gain of 354.02 points, or 0.2 percent.
Market participants turned bullish ahead of major corporate earnings scheduled for next week. Rupee appreciation and growing expectations of further monetary easing by the State Bank of Pakistan also supported sentiment, following softer December inflation data.
Pakistan’s inflation eased for a second consecutive month, reinforcing hopes of additional policy support. Headline Consumer Price Index inflation slowed to 5.6 percent in December 2025, down from 6.1 percent in November and 6.2 percent in October. The decline was driven mainly by a sharp fall in perishable food prices, although analysts noted that higher housing costs and sticky core inflation point to lingering pressures.
On a month-on-month basis, consumer prices fell by 0.4 percent in December, reversing a 0.4 percent increase recorded in November. Despite the improvement, inflation remained above the 4.1 percent level seen in December last year.
PSX highlights the Top 10 Listed Companies by Market Capitalization, reflecting the strength and diversity of Pakistan’s capital market. These leading companies play a vital role in driving market growth across key sectors including energy, banking, cement, and fertilizers. pic.twitter.com/6x5qSVgbtV
— PSX (@pakstockexgltd) January 2, 2026External sector developments added to the constructive tone. The State Bank reported that its foreign exchange reserves rose by $13 million to $15.915 billion in the week ended December 26. At the same time, total liquid reserves slipped by $10 million to $21.012 billion, while reserves held by commercial banks declined by $23 million to $5.097 billion.
Foreign flows into short-term government debt also improved. Local bonds recorded a net inflow of $20 million in December, compared with outflows of $42.2 million in November. Gross purchases of treasury bills stood at $77.29 million, while divestments amounted to $57.27 million as of December 25.
Read: PSX Crosses 176,000 Points as Market Rally Extends Into the New Year
Analysts said foreign participation remained weak during the first half of 2025 due to geopolitical risks and competing global yields. Flows stabilised in the second half as Pakistan’s risk premium eased and policy continuity improved.
In December, the State Bank cut its policy rate by 50 basis points to 10.5 percent, following four consecutive meetings at 11 percent. The move further strengthened expectations of a supportive monetary stance.
The KSE-100 delivered a total return of 51.2 percent in 2025. Data compiled by Zakheera showed banking stocks leading the rally with a 103.8 percent total return, accounting for about 45 percent of index gains. Cement followed with 88.1 percent, fertiliser with 68.5 percent, power with 62 percent, and chemicals with 58.9 percent.
Textiles and technology stocks rose 27 percent and 26.5 percent, respectively. Food and automobile sectors posted gains below 20 percent, while exploration and production advanced 16.3 percent. Pharmaceuticals and oil and gas hovered near 9 percent, and refineries ended the year largely flat.
On Thursday, the benchmark index closed up 1.32 percent at 176,355.49 points, compared with 174,054.32 a day earlier, after touching a then-record intraday high of 176,658.38.
