KSE-100 closes above 95,000 for first time as foreign inflows return
The benchmark index hit a fresh all-time high on the back of IMF optimism, dovish central bank guidance, and a quiet but steady return of foreign portfolio investment.
The Pakistan Stock Exchange's benchmark KSE-100 index closed above the 95,000 mark for the first time in its history on Friday, capping a six-session winning streak that has added nearly 7% to the index this month alone.
Friday's close at 95,142 represents a year-to-date gain of just over 28% — making PSX one of the best-performing equity markets in Asia in 2026, ahead of India's Nifty and on par with Japan's Topix.
What's driving the rally
Three factors have aligned:
- IMF clarity. The fresh tranche disbursement removed near-term sovereign risk, compressing the equity risk premium investors had been pricing in.
- Rate-cut expectations. With headline CPI now firmly below 8%, the State Bank is widely expected to begin cutting its policy rate from September.
- Foreign flows. Net foreign portfolio investment turned positive in May for the first time in 11 months, with cement and bank stocks among the most-bought names.
Sector performance
Cement names have led the charge — D.G. Khan Cement, Lucky Cement, and Maple Leaf are each up more than 50% year-to-date — on expectations of a public-sector construction push tied to the new fiscal year's PSDP.
Banking stocks have lagged the broader market on net interest margin concerns, while textiles have rallied on hopes that GSP+ access to the EU market will be renewed at next month's review.
A note of caution
Veteran market participants are urging restraint. "We've seen this movie before," one Karachi-based fund manager told Signal 24. "Pakistan rallies fast when the macro turns, but the macro can turn the other way just as fast. Trim, don't chase."
The market is closed Monday for a public holiday. Trading resumes Tuesday.
