PTBP Web Desk
Buying momentum continued to dominate the Pakistan Stock Exchange (PSX) on Friday as investor sentiment soared following the announcement that the United States had reduced its reciprocal tariff rate on Pakistani exports. The positive development led to a notable surge in the KSE-100 Index, which gained nearly 500 points during the first half of the trading session.
By midday (12 PM), the benchmark KSE-100 Index was hovering at 139,873.49 points, reflecting an increase of 483.07 points or 0.35% compared to the previous close. This marks the second consecutive day of positive movement in the local bourse.
Key Sectors in the Green
The rally was driven by significant buying in various index-heavy sectors, including:
Cement
Commercial Banks
Fertilizer
Oil and Gas Exploration Companies
Oil Marketing Companies (OMCs)
Among the prominent gainers were MARI Petroleum, Oil and Gas Development Company (OGDC), Sui Northern Gas Pipelines Ltd (SNGPL), Sui Southern Gas Company (SSGC), and Fauji Fertilizer Company (FFC)—all of which traded firmly in the green.
This upward trend has come as a relief to investors who had been watching global and domestic developments closely, especially regarding geopolitical tensions and trade policy changes.
US Reduces Tariffs on Pakistani Exports
Investor optimism was fueled by a key geopolitical development: the US administration’s decision to reduce the reciprocal tariff on Pakistani exports to 19%, significantly lower than the previously proposed 29%. The new rates were imposed under a wide-ranging executive order signed by President Donald Trump late Thursday night.
The executive order, which applies new tariff rates on imports from 69 countries, set import duties ranging from 10% to 41%. For comparison:
India faces a 25% tariff.
Taiwan is subjected to a 20% duty.
Thailand’s exports will face a 19% duty.
South Korea saw a slightly lower rate at 15%.
Pakistan’s inclusion in this list, with a 19% rate, is being seen as favorable by local analysts and investors, particularly as it is significantly lower than many other developing nations.
Background: Trump’s Executive Trade Order
President Trump’s new executive order aims to address what he terms as “imbalances in trade relationships” with foreign nations. The tariffs apply to goods not covered by existing agreements, such as the US-Mexico-Canada Agreement (USMCA).
Notably, Canada’s tariff rate was hiked to 35%, up from 25%, in a separate order focused on fentanyl-related imports. However, Mexico was given a 90-day reprieve to allow more time for trade negotiations, avoiding a blanket 30% tariff on most goods.
President Trump’s remarks about Pakistan during a Thursday evening announcement—calling the trade deal with Pakistan a “historic agreement”—also contributed to the bullish activity at the PSX. The reduced tariff is being interpreted as a signal of improving bilateral economic relations between Islamabad and Washington.
Thursday’s Rally Sets the Stage
Thursday had already set the tone for Friday’s rally. On that day, the KSE-100 Index surged by 978 points, or 0.71%, closing at 139,390.42 points. The sharp jump was largely attributed to President Trump’s surprising tweet regarding a breakthrough trade deal with Pakistan.
Market watchers noted that foreign portfolio investors showed renewed interest in Pakistan’s equity market following this diplomatic and economic development.
Global Markets: Mixed Sentiment
While Pakistan’s stock market celebrated the reduced US tariffs, global markets displayed mixed trends amid broader concerns over the sweeping US trade actions.
MSCI’s Asia-Pacific index (excluding Japan) fell 0.7%, bringing its weekly loss to 1.8%.
South Korea’s KOSPI dropped a steep 3%, and Taiwanese stocks declined by 0.9%.
Japan’s Nikkei was down 0.4%, while Chinese blue chips were flat.
Hong Kong’s Hang Seng Index showed marginal gains of 0.2%.
European markets also signaled a cautious start, with EUROSTOXX 50 futures slipping 0.2%.
In the United States, Nasdaq and S&P 500 futures were both down 0.2% after Amazon’s quarterly earnings missed expectations, causing a 6.6% after-hours drop in its stock.
Outlook for PSX
The PSX’s recent rally could be a turning point for investor sentiment, particularly if Pakistan continues to benefit from favorable international trade adjustments. Analysts suggest that improved trade relations with the US, coupled with consistent performance from key sectors, could pave the way for a more sustainable upward trend in the local equity market.
They caution that further global economic uncertainty—especially related to US monetary policy and geopolitical developments—could still impact market direction in the weeks ahead.
