The benchmark index closed at 177,697 points, supported by banks, power and cement stocks, while lower trading activity reflected cautious investor sentiment.
The Pakistan Stock Exchange’s benchmark KSE-100 Index remained largely range-bound during the week, as investors stayed cautious amid signs that the US-Iran conflict could be moving towards a gradual resolution.
A public holiday also reduced overall market activity during the week. Despite subdued trading, the KSE-100 Index closed at 177,697 points, gaining 530 points, or 0.3% week-on-week (WoW).
Investor sentiment was supported by several positive economic developments. Moody’s upgraded Pakistan’s sovereign credit rating to B3 from Caa1, while maintaining a stable outlook.
Meanwhile, the International Monetary Fund’s fourth review mission under the Extended Fund Facility is expected to visit Pakistan in September 2026. The review will assess progress on structural reforms, including Sovereign Wealth Fund legislation, state-owned enterprise governance and anti-corruption measures.
Pakistan’s foreign exchange reserves also improved during the week. Total liquid reserves rose to $22.6 billion as of August 27, an increase of $81.3 million from the previous week. SBP reserves reached $17.1 billion, while commercial bank reserves stood at $5.5 billion, taking import cover to approximately 2.56 months.
The Pakistani rupee appreciated marginally by 0.02%, closing at Rs277.50 against the US dollar compared with Rs277.56 previously.
In the energy sector, Pakistan’s five major refineries are expected to sign agreements under the Brownfield Refinery Upgradation Policy early next month, potentially unlocking around $6 billion in investment to support domestic production of Euro 5-compliant fuels.
Petroleum prices also increased under the new daily pricing mechanism, with petrol rising by Rs4.82 per litre to Rs342.60 and high-speed diesel increasing by Rs6.91 per litre to Rs371.61.
Banks were the biggest positive contributor, adding 491 points to the index. Power, cement, fertilizer and textile composite sectors also supported the benchmark.
On the other hand, leather and tanneries, oil marketing companies, exploration and production firms, investment banks and miscellaneous stocks recorded negative contributions.
Among individual stocks, UBL, HBL, FFC, HUBC and BOP were the leading positive contributors. NBP, SRVI, PSO, MARI and PPL were the major laggards.
Average daily trading volume declined 15.7% WoW to 712.69 million shares, while average traded value fell 13.8% to $127.4 million, reflecting reduced participation.
Going forward, market direction is expected to remain sensitive to geopolitical developments. However, the ongoing corporate earnings season, with results remaining broadly encouraging, could continue supporting sentiment.
The KSE-100 is currently trading at a price-to-earnings ratio of 8.0x, while offering a dividend yield of 6.2%.