Banking and fertilizer stocks drive KSE-100 higher as easing tensions early in the week support investor sentiment.
KARACHI: The Pakistan Stock Exchange (PSX) ended the week on a positive note, with the benchmark KSE-100 Index gaining 5,073 points, or 2.97% week-on-week (WoW), to close at 176,094 points, despite heightened geopolitical tensions and volatility in global oil prices.
The Pakistan Stock Exchange (PSX) staged a remarkable recovery at the start of the week, surging 7,241 points on Monday after easing geopolitical concerns lifted investor confidence. However, renewed tensions in the Middle East later in the week triggered profit-taking and capped further gains, resulting in a volatile trading pattern.
Investor sentiment also received support after the State Bank of Pakistan’s Monetary Policy Committee (MPC) kept the benchmark policy rate unchanged at 11.5%, in line with market expectations.
The banking sector emerged as the biggest contributor to the weekly rally, adding 1,975 points to the benchmark index. Fertilizer stocks contributed 956 points, followed by cement (520 points), exploration and production (E&P) companies (394 points), and investment banks (242 points).
Among individual stocks, FFC led the gains by contributing 886 points, followed by UBL (840 points), MEBL (329 points), HBL (241 points), and ENGROH (198 points). On the downside, SYS, PIOC, TPLRF1, HMB, and PESL weighed modestly on the benchmark index.
Trading activity also improved during the week. Average daily traded volume increased 19.4% WoW to 831.29 million shares, while the average daily traded value rose 14.2% to approximately $114 million, reflecting stronger investor participation.
The week also witnessed several key developments in Pakistan’s energy sector. The government approved amendments to the Refinery Policy 2023, aimed at accelerating refinery upgrades with an estimated $6 billion investment and supporting Euro-V fuel production through a seven-year incentive package.
Petroleum product imports increased 2% year-on-year to 17.6 million tons during FY26, driven by higher crude oil imports, while local crude production declined 4% YoY to 64,675 barrels per day. RLNG supply fell 28% YoY, reducing its share in the country’s gas mix to 19%, whereas petroleum exports rose 10% to 2 million tons.
Meanwhile, Pakistan’s external sector outlook improved after Saudi Arabia rolled over its $5 billion deposit for another three years, while the country also witnessed $9 billion in foreign currency purchases from the local market during FY26.
During the week, petroleum prices were revised upward under the new pricing mechanism. Motor Spirit (MS) increased by Rs4.63 per litre to Rs336.15, while High-Speed Diesel (HSD) rose by Rs14.38 per litre to Rs393.04.
Analysts expect market direction in the coming week to remain heavily influenced by geopolitical developments, corporate earnings announcements, and movements in global oil prices.
At current levels, the KSE-100 Index is trading at a price-to-earnings (P/E) ratio of 8.0x and offers an attractive dividend yield of 6.3%, indicating valuations remain favorable despite recent market volatility.