Pakistan stock market closes at all-time high as banking sector leads rally

The Pakistan Stock Exchange closed at a record high Monday, buoyed by a rally in the banking sector as investor optimism grew ahead of corporate earnings announcements later this month.

The benchmark KSE-100 index gained 1.64%, or 2,202 points, to settle at 136,502.

Last week’s earnings announcement by United Bank Ltd. (UBL) raised hopes that other banks will also report stronger-than-expected results. Of the 100 listed companies, the top five contributed the most to the gains, four of which were banks. UBL added 546 points, HBL 373 points, Bank Alfalah 193 points, and MCB Bank 155 points.

Ahsan Mehanti of Arif Habib Corporation attributed the bullish close to heightened speculation surrounding the earnings season, bolstered by the IMF's endorsement of Pakistan’s progress on structural reforms under the Extended Fund Facility (EFF).

“Surging exports, soft inflation figures, rising global crude prices, and the government’s ongoing discussions on state-owned enterprise (SOE) privatization all acted as key catalysts in driving today’s rally,” Mehanti said.

An analyst at Al-Habib Capital Markets pointed to the Prime Minister’s recent remarks and the IMF’s acknowledgment of Pakistan’s “strong” reform trajectory under the $7 billion loan program as confidence boosters.

“This historic performance reflects growing optimism within the business community and a renewed belief in Pakistan’s economic direction,” the analyst said.

An analyst at Ismail Iqbal Securities said the index hit an all-time high both intraday and at the close, largely driven by strength in banking stocks. Investor sentiment remained strong as participants positioned ahead of the anticipated corporate results.

According to a Topline Securities analyst, the rally was fueled by strong participation from local mutual funds and institutional investors.

Market sentiment was further lifted after the International Monetary Fund expressed satisfaction with Pakistan’s economic progress, as its resident representative, Mahir Binici, described the country’s performance under the Extended Fund Facility as “strong so far,” according to another analyst.

Market activity remained vibrant, with trading volumes exceeding 838 million shares and the total traded value reaching PKR 37 billion.