Lower fuel prices, easing geopolitical tensions and strong liquidity support weekly gains
KARACHI: The Pakistan Stock Exchange (PSX) ended the week in positive territory, with the benchmark KSE-100 Index gaining 649 points, or 0.36 per cent, to settle at 179,571 points. The weekly advance was supported by easing geopolitical tensions, lower fuel prices, improving macroeconomic indicators and continued investor confidence despite rollover week activity.
Analysts said the market remained resilient throughout the week as investors reacted positively to regional developments, including progress on diplomatic initiatives that helped reduce uncertainty in global financial markets.
Lower Fuel Prices Support Market Outlook
One of the most significant developments during the week was the government’s decision to substantially reduce petroleum prices, providing relief to consumers and businesses alike.
The price of petrol (Motor Spirit) was cut by Rs74.28 per litre to Rs299.50 per litre, while High-Speed Diesel (HSD) was reduced by Rs67.31 per litre to Rs311.47 per litre. The reductions followed a decline in international crude oil prices and adjustments in the petroleum levy structure.
Market participants believe lower fuel costs could help ease inflationary pressures, improve corporate margins and stimulate economic activity in the coming months.
Treasury Bill Auction Reflects Strong Demand
Investor confidence was also reflected in the government’s latest Treasury Bill auction, where authorities raised Rs1.24 trillion, surpassing the target of Rs1.2 trillion.
Cut-off yields declined across all tenors by 39 to 115 basis points, indicating expectations of improving economic conditions and lower interest rates. The 12-month tenor attracted the highest participation, receiving bids worth Rs624.3 billion.
Finance Bill Brings Relief for Exporters
The approval of the Finance Bill 2026 provided another boost to sentiment. The legislation abolished the Super Tax for companies generating more than 80 per cent of their turnover from exports.
Analysts expect the measure to benefit export-oriented industries, particularly the textile sector, by reducing tax liabilities and enhancing competitiveness in international markets.
Energy Sector Records Positive Developments
The energy sector contributed to investor optimism after Oil & Gas Development Company Limited (OGDC) commenced gas production from the Sahito-1 discovery well. Meanwhile, Mari Energies started production from the Shams-1 gas well, supporting efforts to increase domestic energy output.
These developments are expected to strengthen Pakistan’s energy security and reduce dependence on imported fuels over the longer term.
Rupee Shows Stability Against Dollar
The Pakistani rupee remained largely stable during the week, appreciating marginally by 0.02 per cent to close at Rs278.20 against the US dollar.
Analysts attributed the currency’s stability to improving external account indicators, stronger remittance inflows and a better outlook for foreign exchange reserves.
Outlook for the Coming Week
Market experts expect the PSX to remain influenced by developments in global oil markets, regional geopolitics and domestic economic indicators. However, easing tensions in the Middle East, lower fuel prices and supportive fiscal measures are likely to continue underpinning investor sentiment.
The KSE-100 Index is currently trading at a price-to-earnings ratio of around 8.3x and offers a dividend yield of approximately 6.1 per cent, making Pakistani equities attractive compared with several regional markets.
Analysts’ preferred picks include OGDC, PPL, FFC, LUCK, NBP, HUBC, PSO and ATRL, which are expected to benefit from improving economic conditions and sector-specific growth opportunities.
With lower fuel prices, stronger liquidity conditions and improving macroeconomic fundamentals, investors remain cautiously optimistic about the outlook for Pakistan’s stock market in the new fiscal year.
