PSX rallies over 1% as Middle East ceasefire boosts investor sentiment

KARACHI: Shares at the Pakistan Stock Exchange extended gains on Friday, with the benchmark KSE-100 index rising more than 1 per cent in early trade as improved sentiment following a Middle East ceasefire buoyed investor confidence.

The KSE-100 index climbed 1,932 points, or 1.17 per cent, to 167,449 during early session trading, continuing a bullish trend seen throughout the week.

Analysts attributed the rally to easing geopolitical tensions after the ceasefire involving Iran and the United States, which lifted confidence across regional markets.

Across Asia, equities also moved higher, with benchmark indices in Japan, South Korea and Indonesia gaining around 2 per cent. Markets in India and Vietnam rose about 1 per cent, while stocks in Shanghai and Hong Kong were marginally higher.

Separately, the Asian Development Bank said Pakistan’s economy was showing gradual improvement but cautioned that risks remain.

In its latest report, the ADB projected Pakistan’s economic growth at 3.5 per cent in the current fiscal year, accelerating to 4.5 per cent in the next.

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However, it warned that renewed tensions in the Middle East could push inflation higher and impact economic stability. Inflation is expected to average 6.4 per cent in fiscal year 2026 and edge up to 6.5 per cent in fiscal year 2027.

The bank identified rising oil and gas prices as a key risk and stressed the importance of continued structural reforms to withstand external shocks. It added that increased private investment and improvements in construction and industry would support economic growth, alongside a cautious easing in monetary policy by the central bank.