KARACHI, Pakistan — The PSX’s benchmark KSE-100 Index surged about 1.5% to a record close above 179,000, extending the market’s New Year rally. Traders pointed to heavy institutional buying and growing expectations that the State Bank of Pakistan could ease borrowing costs again, Jan. 2, 2026.
According to the Pakistan Stock Exchange market summary, the KSE-100 finished at 179,034.93, up 2,679.44 points from its previous close of 176,355.49. Turnover was brisk, with about 1.11 billion shares traded across the exchange, worth roughly 64.34 billion rupees.
The index also set a fresh intraday high of 179,467.83 before easing into the close, according to a Business Recorder report on the record session. The two-day run has been sharp: the benchmark also rose more than 2,300 points a day earlier as buyers returned across multiple sectors.
PSX rally fueled by institutions and rate-cut bets
Saad Hanif, head of research at Ismail Iqbal Securities, said “the record rally at PSX is largely driven by new-year positioning, strong liquidity, and expectations of further monetary easing.” Market talk has centered on the next Monetary Policy Committee decision and whether a lower policy rate keeps equities attractive against bank deposits and government paper.
Fertilizer shares were among the session’s standouts after strong December sales data, while banks and other index-heavy cyclicals also drew bids. In a separate account, Arab News reported that market participants cited a 34% year-over-year jump in fertilizer sales in December and improving earnings visibility ahead of results due next week.
Rate expectations have firmed after the central bank cut its policy rate by 50 basis points to 10.5%, effective Dec. 16, 2025, according to the State Bank of Pakistan’s December monetary policy statement. Inflation data has helped the narrative: Reuters reported that consumer inflation slowed to 5.6% year over year in December 2025, down from 6.1% in November, while prices declined on a monthly basis. The SBP statement said inflation may rise above its 5%-7% target range later in FY26 due to base effects, suggesting future cuts could be gradual.
PSX record in context
The push through 179,000 is the latest milestone in a longer PSX upswing. In November 2024, the benchmark touched about 91,900 during a rally tied to rate-cut hopes, the Express Tribune reported. By March 2025, it had climbed to 113,713.17 as institutional buying returned, according to another Business Recorder report. It then crossed 167,000 in early December 2025 on renewed institutional buying, according to a Dec. 2025 Express Tribune report.
The next test arrives as companies begin reporting quarterly earnings and investors look for confirmation that profit growth matches the PSX’s faster multiple expansion. For now, the breakout above 179,000 leaves the market firmly in a bullish trend — but after a steep, two-day climb, traders will also be watching for profit-taking swings.
