The Pakistan Stock Exchange (PSX) witnessed a historic surge on Thursday, with the benchmark KSE-100 index breaching the 140,000-point mark for the first time in its history, closing at 140,077 points.

The rally came despite the State Bank of Pakistan’s (SBP) decision to maintain interest rates in its latest monetary policy announcement.

The index surged by 1,650 points during intra-day trading, restoring two key psychological levels — 139,000 and 140,000 — simultaneously. Market sentiment appeared to be largely driven by news of a trade agreement between Pakistan and the United States, which analysts believe could pave the way for fresh foreign investment and exploration of new reserves.

Oil and gas sector stocks led the rally, with notable gains seen in key players amid expectations of renewed interest from global investors. The textile sector also benefited from the news, while banking stocks followed suit, reflecting renewed investor confidence.

While disappointment had initially been expressed over the central bank’s decision not to lower interest rates, the broader market reaction remained overwhelmingly positive, supported by hopes that the trade deal would ease macroeconomic pressures and attract foreign capital.

However, some sectors such as cement, steel, and fertiliser are expected to remain under pressure in the absence of a rate cut, according to market observers.

Analysts say the rally reflects optimism over improved economic ties with the US and potential developments in energy exploration and exports. The positive momentum, they believe, could continue in the coming sessions if macroeconomic indicators remain stable and further details of the trade agreement materialise.