Pakistan stock market crosses yet another all-time high

The Pakistan Stock Exchange closed at an all-time high of over 141,000 points on Friday, following the conclusion of talks on a trade deal between the United States and Pakistan.

Under the deal, the reciprocal tariff on Pakistani exports to the U.S. has been lowered to 19% from 29% earlier. The development sparked activity in the textile sector and led to appreciable gains in the oil and gas sector.

The benchmark KSE-100 index rallied to 141,160 points, marking an intraday high with most of the gains centered around the oil and gas sector.

PSX heavyweights such as OGDC gained 9.8%, PPL 6%, while Mari and Pak Oilfields gained 1.2%, respectively.

The index closed with a gain of 1.2% or 1,644 points to reach 141,035 points.

An analyst from Ismail Iqbal Securities noted that the session began with slight volatility amid uncertainty over Trump tariffs. However, news of possible circular debt resolution lifted sentiment, keeping energy sector players in the spotlight and driving overall market momentum.

Oil & gas exploration companies, commercial banks, and oil & gas marketing companies were major contributors, cumulatively adding 1,512 points to the index, he observed.

The oil and gas sector's rally was mainly due to U.S. President Donald Trump, who shared that the U.S. would help develop Pakistan's oil reserves.

"We have just concluded a Deal with the Country of Pakistan, whereby Pakistan and the United States will work together on developing their massive Oil Reserves," Trump wrote on social media.

"We are in the process of choosing the Oil Company that will lead this Partnership."

Commenting on the U.S. president's post, an analyst told Nukta, "The partnership between a Pakistani company and U.S.-based units would be a major boost and would help explore barren areas. It would not only improve oil and gas reserves but it would help increase foreign direct investment."

The United States and Pakistan hailed a trade deal on Thursday that Islamabad said would lead to lower tariffs and increased investment."

This deal marks the beginning of a new era of economic collaboration especially in energy, mines and minerals, IT, cryptocurrency and other sectors," the Pakistan Ministry of Finance said in a statement following a final round of talks in Washington.

However, analysts were slightly worried due to the inflation figure for July, which at 4.2%, was higher than the expectation of 3.6%.

Inflation stood at 11.1% last July.

The spike was mainly triggered by sharp increases in the prices of fresh vegetables, chicken, and other perishables, alongside notable rises in gas charges and electricity tariffs.

Despite this pick-up, headline inflation remains well below the double-digit levels seen last year, supported by a favorable base effect, relatively stable currency, and better food supply conditions, although energy price adjustments kept near-term price momentum firm.