KARACHI — The Pakistan Stock Exchange (PSX) witnessed an explosive rally on Monday, with the benchmark KSE-100 index gaining over 4,600 points. The massive market surge comes on the heels of the preliminary peace agreement reached between the United States and Iran, which investors hope will alleviate major global inflationary pressures and fully reopen the vital Strait of Hormuz shipping corridor.
Key Highlights
- The benchmark KSE-100 index skyrocketed by 4,639.92 points, closing at an all-time high of 177,039.82.
- Market optimism was heavily driven by plunging international oil prices following the US-Iran diplomatic breakthrough.
- The State Bank of Pakistan subsequently announced its decision to maintain the key policy rate unchanged at 11.5 percent.
- Equities were further buoyed by corporate-friendly measures in the federal budget, including the abolition of the super tax.
KSE-100 jumps 2.5% in early trade as oil prices tumble over 4% and regional tensions ease
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— Profit (@Profitpk) June 15, 2026
Geopolitical Breakthrough Triggers Bull Run
The market opened with high momentum on Monday morning as investors reacted to overnight news that Washington and Tehran had agreed on a framework to end their three-month conflict. Dropping to an intraday low of 175,085 points at 11:00 AM, the KSE-100 index aggressively rebounded to hit a peak of 177,176.72 points late in the afternoon before closing at 177,039.82—a single-day gain of 2.69 percent.
Financial analysts noted that the announcement of the peace deal immediately caused international oil prices to tumble, easing critical fears regarding import-driven domestic inflation. Market experts highlighted that with the current account under control, an ongoing buildup of foreign exchange reserves, and local equities trading well below their long-term price-to-earnings multiples, the global diplomatic resolution acted as a massive catalyst for institutional buying.
Central Bank Policy and Fiscal Relief
The historic rally also coincided with the State Bank of Pakistan’s (SBP) Monetary Policy Committee meeting. Later in the day, the central bank opted to maintain the status quo by keeping the policy rate unchanged at 11.5 percent. Economists stated that the positive real interest rate—expected to hover more than 450 basis points above inflation over the next year—justified the central bank’s decision while protecting the local currency.
Investor confidence was also structurally supported by the newly announced federal budget. The government’s commitment to ongoing fiscal discipline, paired with targeted relief for small and medium-sized enterprises through the elimination of the corporate super tax, significantly strengthened the medium-term outlook for national equities. Analysts project that if international commodity prices remain soft and corporate earnings grow, the capital market could be poised for a prolonged upward rerating.
