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Tuesday, July 23, 2024  
17 Muharram 1446  

PSX soars on budget FY25, KSE-100 surpasses 75,000 mark

The budget targeted modest economic growth of 3.6% for the coming year
Huge amount of foreign trades were expected with PSX’s reclassification. Reuters
Huge amount of foreign trades were expected with PSX’s reclassification. Reuters

The Pakistan Stock Exchange (PSX) had a very strong performance in its first trading session on Thursday a day after the federal government revealed its annual budget.

The benchmark KSE-100 index, which tracks the top 100 companies listed on the exchange, surpassed the 75,000 mark .

At 12:30 pm on Thursday, the KSE-100 benchmark index had reached 75,676.24 points, an increase of more than 3,000 points from the previous day’s close.

The widespread buying was observed across key sectors of the Pakistani stock market, including automobile manufacturers, cement companies, commercial banks, engineering firms, oil and gas marketing companies, and refineries.

The positive market reaction came a day after the Finance Minister, Muhammad Aurangzeb, announced Pakistan’s federal budget for the 2024-25 fiscal year.

The budget targeted modest economic growth of 3.6% for the coming year, as the government sought to appease the International Monetary Fund (IMF) and address the country’s growing fiscal challenges through higher taxation.

Analysts noted that the budget was generally viewed as positive for the stock market, as the government did not change the treatment of Capital Gains Tax (CGT), which remained at normal tax rates.

“Overall, the budgetary measures are positive in a sense that the government has shown intent to bring tax reforms, especially taking stringent measures against non-filers,” Research at Arif Habib Limited (AHL) head Sana Tawfik told Business Recorder.

“This is positive for market as there were some news reports suggesting tax on dividend income will go up,” said Topline Securities in a note.

“Although FED (Federal Excise Duty) was increased on cement, which will be passed on to the customers, the increase in PSDP pushed the sector into positive,” said Tawfik.

In the Public Sector Development Programme (PSDP) by the government, cement and engineering stocks have shown increase.

“The government has proposed to bring exporters into the normal tax regime, which is a negative for the textile sector,” she said.

However, clothes stocks were not up to mark as on Wednesday, KSE-100 Index, gained over 200 points to settle at 72,797.43.

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