Even though the State Bank of Pakistan (SBP) decided to maintain the policy interest rate at 11%, Pakistan stock exchange (PSX) took a sudden turn up on July 31, 2025, due to a significant trade deal that took place between United States and Pakistan.
The KSE-100 index climbed more than 1, 500 points in the intraday and topped the record of 140, 215.22 and settled close to 139, 976.03. Volume of trade and activity of investors increased greatly. The biggest gainers were the energy, banking and cement sectors, which analysts said would increase capital inflows and the growth of exports.
The PSX rally was credited to announcement of a bilateral trade agreement with the United States which was confirmed by President Donald Trump on July 30. The agreement involved developing oil resources in Pakistan, exemptions on tariff in Pakistan products of export.
The PSX performance is an indicator of economic momentum which is attributed to investor confidence in economic direction that is helped by foreign participation and policy continuity. However, the possible danger of foreign tariffs changes and currency pressure in case of increased imports was warned about by analysts.