Bulls made a strong comeback at the Pakistan Stock Exchange (PSX) on Friday, with the benchmark KSE-100 Index surging more than 3,300 points as investors took a sigh of relief amid easing regional geopolitical tensions and expectations of a policy rate cut by the central bank.
According to the PSX website, the market opened on a bullish momentum and the benchmark index touched 184,787.27 levels as of 11:00 am, with an increase of 3,330.94 points. At 12:03 pm, the KSE-100 was trading at 184,443.94 points, up 2987.61 points or 1.65% from the previous close.
Buying interest was broad-based, with gains recorded across automobile assemblers, cement, commercial banks, fertiliser, oil and gas exploration companies, oil marketing companies and power generation stocks. Heavyweight stocks including HUBCO, MARI, OGDC, POL, PPL, PSO, SSGC, SNGPL, MCB, MEBL, NBP and UBL traded higher.
Market participants attributed the sharp rebound to expectations of an easing of monetary policy at the upcoming meeting of the State Bank of Pakistan’s Monetary Policy Committee (MPC) on January 26, 2026, following a decline in yields at the latest Pakistan Investment Bonds auction.
According to a Monetary Policy Survey conducted by Topline Pakistan Research, 80% of market participants expect the SBP to cut interest rates at its first Monetary Policy Committee (MPC) meeting of 2026. Of those expecting a cut, 56.4% foresee a reduction of 50 basis points, 15.4% expect a 100bps cut, 5% see a 25bps cut, and 3% anticipate a 75bps move. The remaining 20% expect no change in the policy rate.
Today’s rally followed a volatile session on Thursday, when the market closed sharply lower due to sustained selling pressure. The KSE-100 had ended at 181,456.34 points, down 1,113.48 points or 0.61%.
Sentiment was also supported by the federal government’s decision to keep petroleum prices unchanged for the next fortnight starting January 16, 2026. High Speed Diesel remains priced at Rs257.08 per litre, while petrol continues at Rs253.17 per litre.
On the global front, tensions arising from a possible US action against Iran and its potential impact on global markets eased after Washington stepped back and withdrew some military personnel from its bases in the Middle East.
Asian equities advanced on Friday as momentum in artificial intelligence-related stocks picked up, while the US dollar hovered near a six-week high after strong US economic data reduced expectations of near-term rate cuts.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5%, staying close to a record high reached in the previous session, helped by strong earnings from Taiwanese chipmaker TSMC. Wall Street futures also edged higher, with Nasdaq futures up 0.22% and S&P 500 futures gaining 0.15% in Asian trading.
Oil prices remained under pressure, while gold and silver declined after US President Donald Trump signalled a wait-and-see approach on developments in Iran. European equity futures were mixed, with EUROSTOXX 50 and FTSE futures edging lower after European markets closed at record highs a day earlier.
