Pakistan Stock Exchange Soars to All-Time High on US Tariff Reduction Boost

4 weeks ago

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Pakistan Stock Exchange

Fueled by a landmark US decision to slash import tariffs, the Pakistan Stock Exchange (PSX) skyrocketed to an unprecedented peak on Friday. Investor confidence surged as the US tariff cut signaled a significant warming in bilateral trade relations between the two nations.

The benchmark KSE-100 Index delivered a stellar performance, closing at 141,034.98 points. This represented a robust gain of 1,644.56 points (1.18%) from Thursday’s close of 139,390.42. During the trading session, the index demonstrated remarkable strength, hitting an intraday high of 141,160.93 points (a jump of 1,770.51 points). Its lowest point was 138,957.70, down just 432.72 points.

This historic market surge followed the US government’s announcement late Thursday revising tariffs. Pakistan will now face a reciprocal tariff rate of 19% on applicable goods, a substantial reduction from the previous 29%. This effectively lowers the tariff burden by approximately 10%.

Financial analysts at Topline Securities commented, “We view this trade deal as neutral for Pakistan overall. Crucially, it allows the country to remain competitive with key rivals, although it doesn’t grant a significant edge over peers.”

Pakistan’s government hailed the agreement on Thursday as a major breakthrough, anticipating it will stimulate greater investment flows and deepen strategic cooperation. The deal culminates months of negotiations initiated last April. Notably, President Trump indicated the US would partner with Pakistan to explore its substantial oil reserves.

Demonstrating immediate trade benefits, Pakistan’s largest refiner, Cnergyico, confirmed its first-ever purchase of US crude. Vice Chairman Usama Qureshi told Reuters the company will import 1 million barrels of oil from Vitol in October, directly linked to the new trade terms.

Beyond the tariff news, the market rally received additional support from the State Bank of Pakistan (SBP). Earlier this week, the central bank unexpectedly held its key policy rate steady at 11% for the second consecutive meeting, contrary to market expectations of another cut. The SBP cited persistent inflation risks, particularly from higher-than-expected adjustments in energy prices, including gas tariffs. However, it maintained its outlook that inflation would stabilize within the target range in the coming months.