The Pakistan Stock Exchange (PSX) experienced a significant rally on Thursday, with the benchmark KSE-100 Index climbing by 1,009.70 points, or 0.89%, to close at 115,094.23 points. This surge is largely attributed to Moody’s Investors Service upgrading its outlook on Pakistan’s banking sector from stable to positive, citing resilient financial performance and improving macroeconomic conditions.

Moody’s projects Pakistan’s economy to grow by 3% in 2025, following a 2.5% growth rate in 2024 and a contraction of 0.2% in 2023. This positive outlook has bolstered investor confidence, leading to increased buying activity in the stock market.

Additionally, Pakistan’s workers’ remittances have shown a strong upward trend, rising 38.6% year-on-year to $3.1 billion in February 2025, up from $2.2 billion in the same month last year. For the first eight months of the fiscal year (July-February 8MFY25), remittances totaled $24 billion, reflecting a substantial 32.5% increase compared to $18.1 billion in the same period last year.

Market analysts also attribute the rally to optimism surrounding the resolution of circular debt in the energy sector and hopes of a favorable outcome from the ongoing International Monetary Fund (IMF) review. An IMF team led by Mission Chief Nathan Porter is currently in Pakistan for the first review of the $7 billion Extended Fund Facility (EFF) secured last year. A successful review could result in the release of the next $1 billion loan tranche, further supporting economic stability.

These developments have collectively contributed to the PSX’s robust performance, reflecting growing investor confidence in Pakistan’s economic prospects.