The bourse continued its record-breaking rally on Tuesday, taking the benchmark KSE-100 Index back above the 120,000 level, propelled by the India ceasefire deal, the release of International Monetary Fund (IMF) funding, and expected tax relief measures in the next federal budget.
The momentum carried over from Monday’s record session, as investors responded positively to better macroeconomic data and diplomatic breakthroughs.
The Pakistan Stock Exchange (PSX) benchmark KSE-100 Index rose to an intraday high of 120,067.12 points, increasing by 2,769.39 points, or 2.36%, from the last close of 117,297.73. The index breached the 120,000 level earlier on April 4.
Aurangzeb Confirms IMF Tranche
Finance Minister Mohammad Aurangzeb, in a Reuters interview, minimized the fiscal cost of the military buildup, stating it could be digested without an updated economic estimate.
He assured that Pakistan will receive a $1 billion tranche from the IMF on Tuesday as part of its current $7 billion Extended Fund Facility (EFF). The IMF Executive Board also approved another $1.4 billion under the Resilience and Sustainability Facility (RSF) to help with climate-related projects.
Aurangzeb mentioned that the government will hold budget negotiations with the IMF between May 14 and May 23, and will wrap up the 2025–26 federal budget in three to four weeks.
The government has suggested reducing the income tax burden on the salaried class by up to Rs50 billion and is working to balance the gap through other taxation measures. Salaried taxpayers have brought in over Rs450 billion in the first ten months of FY25, much higher than the combined collections of retailers and exporters.
Adding to the optimism in the market, April inflation dropped to a historic low of 0.3% year-on-year, and the State Bank of Pakistan reduced its policy rate by 100 basis points to 11%, a turn towards pro-growth monetary policy.
These developments, combined with diplomatic peace and new external financing have boosted investors’ optimism.
On Monday, the KSE-100 Index recorded its biggest single-day gain ever, rising by 10,123.09 points, or 9.45%, following a surprise ceasefire between Pakistan and India.
The development, which was brought about partly by the United States, dissipated weeks of heightened tension and prompted vicious buying in major sectors.
