The Pakistan Stock Exchange (PSX) achieved a historic milestone on Monday as the KSE-100 Index crossed the 110,000-point mark for the first time, driven by investor optimism over improving economic indicators and declining inflation. However, the session was marked by significant volatility due to concerns over potential government taxation on banks’ profits.

The market opened on a negative note, losing over 1,000 points during the early hours of trading after reports emerged that the government had formed a committee to consider increasing taxes on banks’ profits. Despite the initial downturn, the index rebounded strongly, gaining 916.43 points, or 0.84%, to close at 109,970.38. During the session, the index hit an intraday high of 110,358.85 and a low of 107,902.66 before recovering.

According to experts, the news that the government has set up a committee to consider increasing taxation on banks’ profits has dampened sentiment. Most banks are down over 4% already. Banks led the most recent leg of the rally, and some of those returns will be pulled back in the interim.

The banking sector remained under selling pressure throughout the session, as investors reacted to the potential tax measures. However, buying interest was observed in key sectors, including automobile assemblers, cement, fertilizer, oil and gas exploration companies, and oil marketing companies (OMCs).

Index-heavy stocks such as ENGRO, OGDC, MARI, PPL, PSO, SSGC, SNGP, and HUBCO traded in the green, contributing to the market’s recovery and helping the index close near the 110,000-point mark.