PSX climbs on upbeat earnings expectations, strong macro indicators

The equity market rose on Friday as improved macroeconomic indicators and strong corporate result expectations continued to drive investor sentiment.

“Improved macroeconomic indicators and better expectations relating to corporate results” are driving the momentum, said Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index climbed to an intraday high of 134,920.76, gaining 1,138.42 points, or 0.85%, while touching a low of 134,130.40, reflecting an increase of 348.06 points, or 0.26%. However, it closed at 134,299.76 points, registering a 517.42-point rise.

The rally follows fresh data from the State Bank of Pakistan (SBP), which showed the country’s foreign exchange reserves increased by $1.938 billion to $20.029 billion for the week ending July 4.

The central bank's reserves rose by $1.774 billion to $14.502 billion, while commercial banks’ reserves increased by $163 million to $5.527 billion. The SBP cited official inflows as the key contributor.

The increase was largely driven by inflows from multilateral and commercial sources, remittances, and the SBP’s ongoing dollar purchases from the interbank market. By the end of June, SBP reserves had reached $14.51 billion, surpassing the IMF’s target of $13.9 billion and exceeding the central bank’s own projections.

Analysts pointed to China’s rollover of $3.4 billion in deposits and loans, a $1 billion mobilisation from Middle Eastern commercial banks through the ADB’s $500 million policy-based guarantee, and another $500 million from multilateral lenders as major contributors. No additional inflows were reported after June 30.

Remittances also provided a strong backdrop as they hit a record $38.3 billion in FY2025, a 27% increase from the previous fiscal year. In June alone, $3.4 billion was received — a 7.9% increase from June 2024, though 8.0% lower than May 2025.

On Thursday, the KSE-100 Index gained 1,205.36 points, or 0.91%, to 132,782.35 points from 132,576.99 points recorded in the previous session. The highest index of the day remained at 133,902.34 points, while the lowest level was recorded at 132,706.03 points.