KARACHI: The KSE-100 index of the Pakistan Stock Exchange (PSX) gained 649 points, or 0.36%, to close at 179,571 during the three-day week ending Wednesday. The rally followed easing geopolitical tensions, the passage of the FY27 budget, and positive developments in domestic policy, including reductions in taxation and expanded energy production.
On Monday, the index opened at 179,123 but slipped 451 points (-0.25%) to end at 178,472 amid mixed sentiment. Tuesday saw further declines, with the KSE-100 falling 779 points (-0.44%) to 177,693 after an intraday high of 179,406 was eroded by profit-taking. However, Wednesday brought a strong rebound, with broad-based buying propelling the index up 1,878 points (+1.06%) to close the week at 179,571. This surge reflected optimism about geopolitical de-escalation, expectations of lower petrol prices, and anticipation of monetary easing policies.
Key drivers included a peace agreement between the US and Iran, which stabilized oil market outlooks, and the National Assembly’s approval of the FY27 budget, which allocated significant funding to critical sectors like cement, steel, refineries, textiles, pharmaceuticals, and technology. Additionally, the abolition of super tax for corporations with over 80% export revenue further bolstered investor appetite.
Quoted from Arif Habib Limited (AHL):
“The KSE-100 index closed at 179,571 points, up 0.36% week-on-week (+649 points). The advance was primarily driven by the signing of a peace agreement and broader geopolitical easing. The market remained positive despite being a rollover week.”
On Wednesday, energy stocks gained momentum as Singing Well Ltd. initiated gas production at the Sahito-1 discovery well under the Khewari exploration license, while Mari Energies ramped up output from the Shams-1 site. These developments are expected to alleviate domestic gas shortages and support industrial growth.
The Pakistani rupee (PKR) appreciated 0.02% to close at Rs278.20 against the US dollar, reflecting improved import conditions and reduced inflationary pressures. This came as petrol and high-speed diesel (HSD) prices were slashed by Rs74.28 and Rs67.31 per litre, respectively, due to lower ex-refinery costs and reduced petroleum levies.
In the bond market, the government successfully raised Rs1,242.8 billion through T-bill auctions, exceeding its target of Rs1,200 billion. Cut-off yields declined across all tenors by 39–115 basis points, signaling improved investor confidence in sovereign debt. The 12-month tenor saw the highest demand, attracting Rs624.3 billion in allocations.
Market activity remained volatile, with average daily turnover rising to 1.5 billion shares compared to 1.4 billion in the prior week. Broad money (M2) growth accelerated to 9.2% year-on-year, reaching Rs44.2 trillion, driven by a 2.8% weekly increase in bank deposits.
By reducing petrol levies and easing fiscal constraints, policymakers have signaled a commitment to supporting economic growth while managing inflation. The FY27 budget’s sectoral allocations further underscore efforts to stimulate investment in strategic industries. Investors are now closely monitoring global oil prices and domestic policy implementation for further cues on market direction.
Quoted from AKD Securities:
“Market participation (average daily turnover) increased to 1.5 billion shares vs 1.4 billion in the prior week. On the positive side, the US and Iran formally agreed on a 60-day roadmap towards a final deal, sustaining the recent downward momentum in international oil prices, which extended their decline on expectations of smoother crude flows through the Strait of Hormuz.”
As the Pakistan Stock Exchange navigates a volatile regional landscape, the confluence of geopolitical stability, fiscal reforms, and energy sector advancements positions it for sustained growth. However, challenges remain in diversifying the economy beyond commodity-driven shocks and ensuring equitable distribution of development benefits.
