Karachi, January 3, 2026: Pakistan Stock Exchange’s benchmark KSE-100 index posted a strong weekly gain of around 4 percent, climbing 6,634 points from 172,401 last week to 179,035 this week, according to a report by Arif Habib Limited (AHL). The surge was driven by year-opening buying interest and positive market sentiment.
Economic Indicators Supporting the Rally
Pakistan’s GDP growth in 1QFY26 recorded 3.71%, up from 1.56% in 1QFY25, though slightly lower than 6.17% in 4QFY25. The growth was led by a robust industrial sector expansion of 9.4%, along with agriculture and services growth of 2.9% and 2.4%, respectively.
Oil Marketing Companies (OMC) saw a 6% YoY rise in sales to 1.35 million tons in December 2025, although volumes dipped 5% MoM. Cumulatively, 1HFY26 OMC offtake reached 8.16 million tons, a 2% YoY increase. Overall refinery upliftment grew 0.9% YoY, supported by stronger Motor Spirit (MS) and Furnace Oil (FO) sales, which offset weaker High-Speed Diesel (HSD) demand. HSD upliftment fell 8.6% YoY to 396k tons, while FO sales rose 11.1% YoY to 227k tons, mainly due to higher refinery exports.
Petrol (MS) prices declined by PKR 10.28/litre to PKR 253.17, while HSD prices dropped PKR 8.57/litre to PKR 257.08, reflecting reductions in ex-refinery pricing.
Inflation and Reserves Update
Consumer Price Index (CPI) for December 2025 eased to 5.6% YoY from 6.1% in November. Meanwhile, State Bank reserves increased by USD 12.6 million to USD 15.9 billion, while commercial bank reserves fell slightly by USD 23 million. The Pakistani rupee strengthened marginally against the US dollar, closing at PKR 280.11/USD, up 0.02% WoW.
Market Outlook
Investor sentiment is expected to remain positive, with the KSE-100 trading at a PER of 8.67x versus its 15-year average of 8.80x, and offering a dividend yield of ~5.61%, close to the historical average of ~6.18%. Analysts suggest that ongoing economic recovery and strong corporate performance may support further gains in the short term.