ISLAMABAD: The Pakistan Stock Exchange (PSX) reached a historic milestone on Wednesday, surging past the 124,000-point mark for the first time in its history.
Investors reacted positively to the federal budget 2025-26, which was widely seen as favorable to capital markets.
The KSE-100 Index jumped 2,285 points, or 1.87%, to close at 124,309.57 by midday trading.
The rally followed a 400-point gain on Tuesday, driven by pre-budget optimism.
The absence of new taxes on capital markets and stability in existing tax regimes helped fuel the positive momentum.
Analysts described the budget as “neutral to positive” with no surprises for listed companies.
Investor sentiment remained upbeat despite a record tax shortfall in the outgoing fiscal year.
The government has targeted a revenue collection of Rs14.13 trillion, an increase of 18.7% from the previous year.
Market Sentiment Turns Bullish
Market experts believe the budget removed key uncertainties around taxation on equities.
Awais Ashraf, Director at AKD Securities, said that investors welcomed the decision to avoid imposing new levies on the stock market.
He added that increased taxation on fixed-income returns may push savers toward equity investments.
Capital gains and dividend taxes remained unchanged, further strengthening investor confidence.
Mixed Business Reaction to Budget
While the PSX surged, business leaders had mixed views on the fiscal plan.
Ehsan Malik of the Pakistan Business Council said the real estate sector was the biggest beneficiary.
He pointed out that tax relief in property transactions would drive growth in that segment.
However, the Overseas Investors Chamber of Commerce criticized the lack of reforms in corporate tax structures.
The stock market’s strong reaction reflects confidence in economic stability and continuity in policy direction.
The focus on documentation and enforcement is expected to further aid market sentiment in the coming months.
