PSX hits new peak despite economic concerns

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KARACHI: Despite signs of economic fragility, including a current account deficit and a sharp plunge in foreign direct investment in December 2025, equity investors continued their buying spree, propelling the Pakistan Stock Exchange (PSX) to a fresh all-time closing high near the 188,000-point mark on Monday amid strong expectations of another policy rate cut.

According to Topline Securities Ltd, bulls remained firmly in control throughout the session, driving the benchmark index to an intraday high of 2,783 points before it settled at 187,761, up 2,662 points or 1.44pc.

Market sentiment rem­ained buoyant amid growing expectations of an imminent interest rate cut, with participants increasingly pricing in a 50-basis-point reduction at the forthcoming monetary policy meeting on Jan 26. This outlook sustained broad-based buying across sectors.

Select stocks, including Nishat Mills Ltd, Adamjee Insurance Company Ltd, IGI Holdings Ltd and Lucky Cement, attracted notable investor interest. On the index front, Engro Holdings, United Bank, Hub Power, Fauji Fertiliser, Meezan Bank and Service Industries emerged as the top contributors, together adding 1,554 points.

Ali Najib, deputy head of trading at Arif Habib Ltd, said the PSX extended its bullish momentum across the board, supported by upbeat sentiment, better-than-expected corporate results, and rising expectations of a policy rate cut. He added that recent Treasury bill and Pakistan Investment Bond auctions had reinforced signals of further monetary easing.

On the corporate front, hydrocarbons were discovered in the Tal Block, with expected gas production of 1.37 million cubic feet per day. MOL operates the block with a 10pc stake, while Pakistan Petroleum and OGDC each hold 30pc, Pakistan Oilfields owns 25pc, and Government Holdings (Pvt) Ltd retains 5pc.

On the macroeconomic side, Pakistan recorded a current account deficit of $244 million in December 2025, compared to surpluses of $454m in December 2024 and $98m in November 2025. During the first half of FY26, the current account posted a deficit of $1.174 billion, compared with a surplus of $957 million in the same period last year. The country also witnessed a net FDI outflow of $135m in December.

Trading activity rose 24.92pc to 1.19bn shares, although traded value dec­lined 8.15pc to Rs63.8bn. Bank Makramah Ltd led the volume chart with 247m shares.

Market participants expect the positive mom­entum to persist, potentially pushing the index to new highs, supported by expectations of monetary easing and improving corporate earnings, although bouts of volatility cannot be ruled out.

Published in Dawn, January 20th, 2026

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