The Pakistan Stock Exchange (PSX) experienced a substantial gain as the KSE-100 Index quickly surpassed the 123,000 mark shortly after the market opened on Wednesday.

By 9:40am, the index had risen by 1,439.42 points, reaching 123,463.86, marking an increase of 1.18%.

Analysts attributed the market’s upswing to the absence of major tax changes in the federal budget. Samiullah Tariq, Head of Research at Pak Kuwait Investment Company, noted that the capital gains tax remains at 15%.

Finance Minister Muhammad Aurangzeb presented the federal budget for 2025-26, which has a total outlay of Rs 17.573 trillion, aiming for a GDP growth rate of 4.2%, up from 2.7% in the previous year. Aurangzeb described the budget as a foundational step toward creating a competitive economy and boosting exports.

The government set an inflation target of 7.5% for the upcoming fiscal year and projected a fiscal deficit of 3.9% of GDP, down from 5.9% in the outgoing fiscal year. The primary surplus is targeted at 2.4% of GDP.

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The positive market sentiment coincided with international share markets cautiously responding to progress in U.S.-China trade talks, while investors awaited details on the implications of these discussions.

Overall, the PSX’s positive reaction reflects investor confidence following the budget announcement, with key sectors like automobiles, cement, and banking showing robust buying activity.