The Pakistan Stock Exchange (PSX) closed slightly higher on Tuesday, buoyed by strong institutional buying, favorable financial results, and positive market sentiment linked to the ongoing trade negotiations with the US. The KSE-100 Index, which briefly hit an intraday high, saw a modest gain, reflecting optimism around key economic developments.
On Tuesday, the PSX witnessed a marginal gain, with the benchmark KSE-100 Index closing at 147,005.32 points, up by 75.48 points, or 0.05%, from the previous day’s close. During the session, the index surged to an intraday high of 147,976.98 points before retreating slightly, showcasing the volatility characteristic of the market.
Market analysts attributed the upward momentum to a combination of strong financial results, institutional buying, and the optimism surrounding the finalization of the Pakistan-US trade deal. Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, highlighted that stocks reached new all-time highs, driven by positive speculation regarding the US investment commitments under the trade deal and improved relations between Pakistan and the US.
“Investments from mutual funds are propelling the market forward amid solid corporate earnings, along with expectations of a surge in exports due to the India-US tariff conflict,” Mehanti said. He further noted that record remittances of $3.2 billion in July 2025, the stability of the Pakistani rupee, and positive macroeconomic trends were contributing to the bullish sentiment at the PSX.
Meanwhile, AAH Soomro, an independent economic analyst, pointed out that the market’s growth is also being supported by ongoing power sector reforms and circular debt resolution efforts by the government. The reduction in circular debt by Rs780 billion to Rs1.6 trillion is a significant step towards stabilizing Pakistan’s energy sector, with additional reforms aimed at improving efficiency and privatizing distribution companies.
On the international front, Pakistan and the US are reportedly in the final stages of discussions to iron out details of the trade deal, particularly focusing on investment flows. The government is aiming for improved tariff concessions on select exports, following a recent agreement on a 19% tariff reduction.
Business sentiment has reached its highest level in nearly four years, with the latest Gallup Pakistan survey indicating that 46% of respondents view the current government’s economic management more favorably than its predecessor. This shift in sentiment reflects growing confidence in Pakistan’s economic trajectory, bolstered by recent developments in domestic and international policies.
