The equity market rose on Friday as investors bought the dip pointing to US–Iran de-escalation and a dovish tilt in rate expectations, lifting risk appetite early in the session.
The Pakistan Stock Exchange’s benchmark KSE-100 Index climbed to an intraday high of 184,645.65, gaining 3,189.32 points, 1.76%, from the previous close of 181,456.33, and reached a low of 182,559.69, up 1,103.36 points, or 0.61%.
“The market witnessed a sharp recovery after the latest news flows suggest the de-escalation between the US and Iran,” said Huzaifa Riaz, Director, Mayari Securities (Pvt) Limited.
“Additionally, sentiment around the next monetary policy remains dovish as the latest auction suggests a 50 bps cut, which could further improve a risk-on sentiment,” he added.
Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, echoed the sentiments, saying: “Bullish activity witnessed in early session at PSX amid reports of US-Iran de-escalation,” adding: “Speculations over further SBP policy easing amid falling government bond yields played a catalyst role in bullish activity at PSX.”
A Topline Research survey ahead of the State Bank of Pakistan (SBP) Monetary Policy Committee meeting on January 26, 2026, showed 80% of participants expect a rate cut.
Of those, 56.4% see 50 bps, 15.4% expect 100 bps, 5% look for 25 bps, and 3% foresee 75 bps, while 20% expect no change. In the previous decision on December 15, 2025, the SBP cut 50 bps.
SBP reserves rose $16 million to $16.072 billion in the week ended January 9, taking total liquid reserves to $21.248 billion (commercial banks $5.177 billion, up $40 million).
The SBP noted ongoing foreign exchange purchases amid a steadier current account supported by remittances; from June 2024 to September 2025, net market purchases totalled $9.7 billion.
The central bank projects the FY26 current account deficit at 0–1% of GDP and sees reserves at $17.8 billion by June 2026 with planned official inflows.
On Thursday, the KSE-100 Index fell 1,113.48 points (0.61%) to 181,456.34 from 182,569.82, after trading between 183,717.54 and 180,783.63.
