KARACHI, Pakistan

After days of intense selling pressure, buying momentum returned to the Pakistan Stock Exchange (PSX) on Monday, driving the benchmark KSE-100 Index to a formidable 4.2% gain. This robust resurgence occurred as the State Bank of Pakistan (SBP) maintained its policy rate at 11.5%, aligning perfectly with market expectations.

Following a volatile opening that briefly pushed the index below the 175,500 threshold, institutional investors and retail participants aggressively stepped in. The market traded on a steadfast upward trajectory, accelerating in the afternoon session to reach an intraday high of 178,588.33 before settling at 178,262.33, marking an ascent of 7,241.13 points.

“The primary catalyst for this upward trajectory is the notable 4-5% decline in global oil prices, coupled with active institutional buying and optimism surrounding the ongoing corporate earnings season,” noted Sana Tawfik, Head of Research at Arif Habib Limited.

The Monetary Policy Committee’s decision to hold the policy rate steady was widely anticipated. Analysts had cautioned that escalating geopolitical tensions in the Middle East, particularly recent Houthi blockade announcements in the Red Sea, overshadowed domestic arguments for monetary easing. However, a temporary pause in hostilities over the weekend alleviated immediate geopolitical anxieties, allowing Brent crude to slide below the psychologically significant $90 per barrel mark.

This amelioration in commodity prices provided crucial relief from inflationary pressures, subsequently boosting bond yields and investor confidence ahead of a packed week of central bank meetings.

Interbank closing #ExchangeRate for today https://sbp.org.pk/assets/document/mark-to-market-revaluation-exchange-rate-27-july-2026.pdf #sbpexchangerate

— State Bank of Pakistan (@StateBank_Pak) July 27, 2026

Note: For official market data and real-time indices, readers are directed to the original Business Recorder report.