Web Desk(National Times)- The equity market surged on Thursday as foreign exchange reserve gains and mutual fund inflows fuelled optimism, touching fresh highs. The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index closed at 138,665.49 points, up 2,285.53 points, or 1.68%, from the previous close of 136,379.96. During the session, the index rallied to an intraday high of 138,943.47, gaining 2,563.51 points, or 1.88%, while the low of the day stood at 136,674.98, showing an increase of 295.02 points, or 0.22%. “Mutual funds have invested more than $50 million in the equity markets after the budget increased tax on money market returns as well as SBP reserves increase,” said independent investment and economic analyst AAH Soomro.  “This liquidity backed rally will continue in the 140,000 plus range for KSE 100,” he added. Investor sentiment remained buoyant as Pakistan’s central bank foreign exchange reserves surged by $5.12 billion to $14.51 billion at the close of FY2025, surpassing the International Monetary Fund’s (IMF) $13.9 billion target. This is a sharp rise from $9.39 billion reported on June 30, 2024. The increase in reserves reflects a combination of improved current account dynamics and the materialisation of planned financial inflows.  Though the central bank did not provide detailed commentary on the jump, in a statement last month it noted $3.10 billion in commercial borrowings and over $500 million from multilateral lenders. The gain followed a major drawdown of $2.66 billion as of June 20 due to external debt repayments — the second largest weekly fall on record. However, the timely rollover of $3.4 billion in Chinese loans restored confidence.  Of this, $1.3 billion was refinanced commercial lending previously repaid by Islamabad, while $2.1 billion had been part of SBP’s reserves over the past three years and was renewed in June. On Wednesday, the KSE-100 increased by 440.1 points, or 0.32%, to 136,379.96 points from 135,939.87 points recorded in the last session. The highest index of the day remained at 137,232.11 points, while the lowest level was recorded at 135,542.89 points.