Bullish streak continues as PSX tops 179,000 ahead of earnings week

The stock market opened on the front foot on Friday, breaching the 179,000 mark for the first time and setting a fresh all-time intraday high, as investors braced for next week’s earnings, rupee gains and speculation on further policy easing by the State Bank of Pakistan (SBP) after a softer December Consumer Price Index (CPI) print.

The benchmark Pakistan Stock Exchange (PSX) KSE-100 climbed to an intraday high of 179,016.88, gaining 2,661.39 points or 1.51%, and settled at 176,709.51, reflecting a gain of 354.02 points or 354.02%.

“The bullish activity was seen ahead of the important earnings announcements coming next week,” said Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities.

“Rupee gains and speculation of further easing of SBP’s policy after CPI inflation data pegged at 5.6% in December 2025 catalyzed bullish activity in the PSX,” it added.

Inflation in Pakistan fell for a second straight month in December, raising hopes for further policy easing. Headline CPI inflation slowed to 5.6%, mainly due to a sharp fall in perishable food prices. However, rising housing costs and steady core inflation signaled lingering pressures.

The CPI fell from 6.1% in November and 6.2% in October, but remained above 4.1% in December last year. On a monthly basis, consumer prices fell 0.4% in December, reversing a 0.4% increase in November.

Stocks and flows added to the bullish tone. The SBP said foreign exchange reserves rose by $13 million to $15.915 billion in the week ended December 26, even as total liquid reserves fell by $10 million to $21.012 billion and commercial banks’ reserves fell $23 million to $5.097 billion.

Short-term local government bonds recorded a net foreign inflow of $20 million in December compared to $42.2 million in outflows in November. Gross bill purchases were $77.29 million and issuances were $57.27 million as of December 25.

Analysts noted that 2025 flows were weak in the first half amid geopolitical and competitive returns, before stabilizing in the second half as Pakistan’s risk premium declined and policy continuity improved.

The SBP cut its policy rate by 50 bps to 10.5% in December after four meetings unchanged at 11%.

The KSE-100 delivered a total return of 51.2% in 2025. Data compiled by Zakheera shows that banks lead with a total return of 103.8% (about 45% of the index’s gains), followed by cement (88.1%), fertilizers (68.5%), power (62%) and chemicals (8%) (5).

Textiles and technology grew by 27% and 26.5%, respectively. Food and cars were under 20%. Exploration and production gained 16.3%. Pharmaceuticals and oil and gas were close to 9%, while refineries closed steadily.

On Thursday, the benchmark index closed up 1.32% at 176,355.49 points from its previous close of 174,054.32 points, after hitting an intraday high of 176,658.38 points.