KARACHI/ISLAMABAD – The Pakistan Stock Exchange (PSX) opened Friday with renewed energy, reacting positively to the National Assembly’s passage of the federal budget, pushing the KSE-100 Index up by 1,581.77 points, or 1.3%, to reach 123,628.23 in intra-day trading.
The trading session, which saw the index hover between 122,222.69 and 123,628.23, paused briefly for the Namaz break and is scheduled to resume afterward. A total of 81 million shares exchanged hands, with trading volumes crossing Rs9 billion—underscoring revived investor interest.
The uptick came a day after the Assembly approved the Rs17.6 trillion federal budget for FY2025-26, along with Rs463 billion in fresh taxation measures. These include a widened net covering the digital economy. However, the attempt to ban transactions by ineligible individuals—a key enforcement mechanism—was significantly diluted before approval.
The vote signaled a strong endorsement from the coalition government, with 201 MNAs supporting one of the key budget clauses against 57 opposition votes. This marks the second consecutive budget presented by Finance Minister Muhammad Aurangzeb and passed under Prime Minister Shehbaz Sharif’s current tenure.
With President Asif Ali Zardari’s formal assent, the Finance Act 2025 will come into force starting Tuesday.
Analysts are now focusing on how the government’s spending priorities will shape fiscal and economic outcomes. Of the Rs17.6 trillion outlay, interest payments will consume the lion’s share at Rs8.2 trillion. Defense spending follows at Rs2.55 trillion, excluding military pensions and development funds. Subsidies are the third-largest component at Rs1.1 trillion, with Rs1 trillion allocated for each—pensions and development—and Rs917 billion set aside for administrative operations.
The passage of the budget—despite significant political opposition and criticism over new tax measures—appears to have reassured markets for now.