Karachi, January 17, 2026 – The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) remained largely range-bound during the past week but managed to close in positive territory, reflecting cautious yet improving investor sentiment.
According to Arif Habib Limited, the KSE-100 index settled at 185,099 points, posting a weekly gain of 689 points, or 0.4 percent, for the week ended January 16, 2026, compared to the previous week’s close.
Market Overview
Market activity stayed subdued for most of the week as escalating geopolitical uncertainties prompted investors to adopt a wait-and-see approach. However, sentiment improved sharply on Friday, when the market staged a late-session rally. The rebound was supported by fresh liquidity, easing geopolitical tensions, and growing expectations of a policy rate cut in the upcoming Monetary Policy Statement (MPS).
Key Economic and Sector Updates
The government raised PKR 488 billion through the Pakistan Investment Bonds (PIB) auction, surpassing the target of PKR 450 billion. Cut-off yields declined by 59 to 70 basis points across all tenors, indicating easing inflation expectations.
Auto sector performance remained mixed, with car, LCV, van, and jeep sales declining 14 percent month-on-month to 13,300 units in December 2025. On a year-on-year basis, however, sales surged 35 percent, while cumulative sales during 1HFY26 rose 46 percent YoY to 88,000 units.
Oil production increased 1.1 percent week-on-week to 65,444 barrels per day, supported by higher output from northern fields amid reduced curtailments. Gas production climbed to 3,012 mmcfd, the highest level since mid-March 2025, driven by increased supply to fertilizer and power sectors.
Fuel prices remained unchanged, with MS priced at PKR 253.17 per litre and HSD at PKR 257.08 per litre. Meanwhile, SBP-held foreign exchange reserves increased by USD 16.1 million to USD 16.1 billion.
The Pakistani rupee appreciated marginally, strengthening 0.03 percent week-on-week to close at PKR 279.95 per US dollar.
Outlook and Recommendation
Looking ahead, analysts expect the KSE-100 index to maintain a positive bias in the coming week, supported by anticipation surrounding the monetary policy decision and potential interest rate cuts. Additionally, the ongoing corporate result season could provide further upside, particularly if companies deliver earnings surprises.