Pakistan Stock Exchange Gains 0.36% in Volatile Week Ahead of Ashura Holidays

KARACHI: The Pakistan Stock Exchange (PSX) concluded a volatile three-session trading week with modest gains, as a strong final-session rally helped the benchmark KSE-100 index overcome earlier declines ahead of the extended Ashura holidays.

According to Arif Habib Ltd, the KSE-100 index settled at 179,571 points, marking a weekly increase of 649 points, or 0.36%. The recovery was underpinned by easing geopolitical tensions following the signing of a peace memorandum of understanding and an improved investor sentiment despite the shortened week.

Market activity remained uneven throughout the abbreviated week, with the index declining over the first two sessions before rebounding on Wednesday. Analysts noted that recent de-escalation in tensions involving the US and Iran bolstered market sentiment and raised expectations for continued stability in the coming week.

Among key economic developments, petrol and high-speed diesel prices were reduced by Rs74.28 and Rs67.31 per litre to Rs299.50 and Rs311.47, respectively, reflecting lower ex-refinery costs and a reduction in the petroleum levy.

KSE index closes at 179,571 as OGDC, cement lead recovery after two-session drop

The government successfully raised Rs1.24 trillion through a treasury bill auction, exceeding the target of Rs1.2 trillion, with cut-off yields declining across all maturities by 39 to 115 basis points. The 12-month paper attracted the largest share of investment.

The approved Finance Bill 2026 abolished super tax for companies deriving more than 80% of their turnover from exports, a move welcomed by the corporate sector.

In the energy sector, Oil and Gas Development Company Ltd (OGDC) commenced gas production from the Sahito-1 discovery well in the Khewari Exploration Licence, while Mari Energies initiated production from the Shams-1 well, supporting domestic gas supply.

The rupee also appreciated marginally, gaining 0.02% against the dollar to close the week at Rs278.20.

Exploration and production companies contributed the most to the index’s gain with 365 points, followed by cement (352 points), leather and tanneries (126 points), textile composites (71 points) and power generation (64 points). Banking stocks negatively impacted the market, reducing the index by 226 points, while technology, investment banks, fertilisers and refineries also recorded losses.

Among individual stocks, OGDC added 196 points to the index, followed by United Bank Ltd, Pakistan Petroleum Ltd, Service Industries and Maple Leaf Cement. Decliners included Bank Al-Habib, Bank Alfalah, Habib Bank, Fauji Fertiliser Company and Pakistan State Oil.

Average daily trading volume reached 808 million shares, representing a 30% decline from the previous week, while average traded value fell 41% to $134 million.

AKD Securities highlighted that the National Assembly’s approval of the Rs18.8 trillion FY27 budget supported market sentiment, particularly for cement, steel, refinery, textile, pharmaceutical and technology sectors. The brokerage also cited lower fuel prices and a significant decline in treasury bill yields as positive factors for the market.

Additional notable developments included expectations of $3.24 billion in savings from the conversion of the Jamshoro Power Plant, an agreement between the government and oil industry on a petroleum pricing mechanism, and progress toward transferring control of Pakistan International Airlines to new owners.

Sector-wise, leather and tanneries, sugar and allied industries, and textile composites were the top performers, while vanaspati and allied industries, synthetic and rayon, and refineries lagged behind.

Flow data indicated that companies were the largest net buyers during the week, while foreign investors remained net sellers.

Looking ahead, analysts expect the market to maintain its positive trajectory, supported by easing inflationary pressures, lower oil prices and expectations of favourable corporate earnings. Progress in US-Iran negotiations and movements in international crude prices are likely to remain key drivers of investor sentiment.

The market continues to trade at attractive valuations, with the KSE-100 index priced at 8.3 times earnings and offering a dividend yield of 6.1%, while AKD Securities estimates a forward price-to-earnings ratio of 7.1 times.

Source link