PSX opens higher as investor confidence rises following Moody's outlook upgrade

KARACHI (Dunya News) – The Pakistan Stock Exchange (PSX) opened the day on a positive note as investor confidence boosted following the Moody’s outlook upgrade for Pakistan.

The benchmark KSE-100 index has gained 792.31 points, or 0.54 percent, to reach 147,321.61 in early trading.

This rise follows a bearish session earlier, during which the index shed 476 points, closing at 146,529.30. The shift in momentum reflects improved investor confidence amid growing optimism about the country's economic outlook and macroeconomic stability.

Market participants welcomed Moody’s decision, viewing it as a signal of returning stability and potential investment opportunities in key sectors.

Moody's upgrades Pakistan's rating outlook to 'stable'

Earlier this week, Moody’s Ratings upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings from Caa2 to Caa1, also raising the rating for the senior unsecured Medium-Term Note (MTN) programme from (P)Caa2 to (P)Caa1.

Alongside the upgrade, Moody’s revised Pakistan’s outlook from “positive” to “stable.” The agency attributed this improvement to the country’s strengthening external position and continued reform progress under the IMF’s Extended Fund Facility (EFF).

This rating action follows similar upgrades by Fitch Ratings and S&P Global, reflecting growing confidence in Pakistan’s economic direction.

Moody’s noted that foreign exchange reserves are expected to keep improving, although Pakistan will still rely on timely financial support from international partners. It also highlighted that the country’s fiscal health is showing signs of recovery, supported by a broader tax base. While debt affordability has improved, Pakistan still ranks among the weakest sovereigns in this regard.

The rating remains tempered by persistent governance challenges and high political uncertainty

Read more:Moody's upgrades Pakistani banking sector outlook to positive

According to Moody’s, the stable outlook suggests a balance of risks. On the positive side, debt servicing costs and the external account could improve faster than anticipated while on the downside, delays in implementing necessary reforms could hinder access to external financing and pressure the country’s external buffers again.

The Caa1 rating also applies to the foreign currency senior unsecured debt under the Pakistan Global Sukuk Programme Co Ltd, which Moody’s considers to be direct obligations of the Government of Pakistan. The outlook for this programme was also revised from positive to stable, in line with the sovereign’s new outlook.