Karachi, March 7, 2026 – The benchmark KSE-100 Index at the Pakistan Stock Exchange recorded a sharp weekly decline of 6.3% for the week ended March 6, 2026, as investor sentiment weakened due to escalating geopolitical tensions in the Middle East.
According to analysts at Arif Habib Limited, the market showed a lackluster performance throughout the week, with the index closing at 157,496 points, down 10,566 points week-on-week. The sell-off was largely driven by uncertainty surrounding the ongoing US-Iran conflict, which heightened risk aversion among investors.
Economic indicators released during the week also influenced market sentiment. Pakistan’s Consumer Price Index (CPI) for February 2026 rose to 7% year-on-year, the highest level since October 2024, compared with 5.8% in January 2026.
Meanwhile, Pakistan recorded a trade deficit of $3 billion in February 2026. Exports stood at $2.3 billion, reflecting an 8% year-on-year decline, while imports decreased slightly to $5.3 billion, down 1.6% YoY.
In the industrial sector, cement dispatches increased by 12.53% YoY to 4.19 million tons in February 2026, compared with 3.73 million tons in the same month last year. However, urea offtake remained weak, falling 28% YoY to 251,000 tons, marking the lowest monthly offtake in recent months.
Energy sector data showed gas production declining 0.1% week-on-week to 2,687 mmcfd, while oil production dropped 2.9% WoW to 59,103 barrels per day in the fourth week of February.
In the money market, the government raised Rs581.7 billion in the latest treasury bill auction, with yields rising 21.5 to 39.3 basis points across tenors, reflecting tightening liquidity conditions.
Pakistan’s total public debt increased 1% month-on-month to Rs79.3 trillion in February 2026, compared with Rs72.1 trillion in January 2025.
Meanwhile, the country’s liquid foreign exchange reserves stood at $21.4 billion, including $16.3 billion held by the State Bank of Pakistan and $5.1 billion by commercial banks.
The Pakistani rupee remained largely stable against the US dollar, appreciating 0.02% week-on-week to Rs279.41 per dollar.
Market analysts expect the direction of the KSE-100 Index in the coming week to depend largely on geopolitical developments and the outcome of the upcoming monetary policy meeting by the State Bank of Pakistan.
Currently, the benchmark index is trading at a price-to-earnings (P/E) ratio of 8.1x, offering an attractive dividend yield of around 6.3%, which analysts say could support valuations once market stability returns.