PSX ends week strong despite regional tensions

KSE-100 index rises 2,342 points amid sector boosts, macro stability signals

KARACHI:

Pakistan's stock market extended gains during the outgoing week despite elevated geopolitical tensions, with sector-specific triggers helping offset anxiety over Islamabad-Kabul frictions and regional uncertainty.

On a day-on-day basis, after three consecutive sessions of closing below 160k, the Pakistan Stock Exchange (PSX) regained its consolidation zone of 160k-170k on Monday as the benchmark KSE-100 index closed at 161,538 (+1,946 points; or 1.22%). However, the market turned negative on Tuesday as deteriorating security conditions weighed heavily on investor sentiment. The index settled at 157,871, losing 3,668 points, or 2.27%.

After a turbulent previous session, the bourse saw a clash of bulls and bears on Wednesday as early optimism briefly lifted investor sentiment. The day ended at 158,184 (+313 points; or 0.20%). On Thursday, the PSX regained its consolidation zone of 160k-170k, with the KSE-100 index closing at 160,658 (+2,474 points; or 1.56%). Bullish activity dominated trading on the last day on Friday, driving the index up by 1,278 points as investors took cue from the potential disbursement of International Monetary Fund (IMF) loan tranche. Healthy buying by mutual funds also aided the positive momentum in the market, which closed at 161,935, up 0.80%.

Arif Habib Limited (AHL) noted that the KSE-100 index maintained its upward trajectory during the outgoing week, despite regional tensions, as sector-specific catalysts lifted investor sentiment. The fertiliser sector kept a strong momentum after reports that the Economic Coordination Committee (ECC) had approved a shift from expensive re-gasified liquefied natural gas (RLNG) to indigenous Mari gas, a move expected to ease subsidy pressures and stabilise urea prices.

Cement stocks also rallied, fuelled by renewed investor confidence amid fresh merger and acquisition (M&A) activity. Supported by these favourable developments, the benchmark index closed the week at 161,935.19, reflecting a surge of 2,342.29 points, AHL said. In the latest T-bill auction, the government raised Rs492.9 billion against the target of Rs550 billion. Participation remained strong at Rs1,621.7 billion. Yields declined across shorter tenors, with one-month and three-month maturities down 1.2 basis points (bps) and 0.6 bps, respectively, while the six-month tenor inched up 0.1 bps and the 12-month remained unchanged. Gross inflows into the Roshan Digital Account reached $11,313 million by October 2025.

Out of the total received funds, $1,903 million was repatriated while $7,263 million was utilised locally. With this, the net repatriable liability stood at $2,148 million. In Oct'25, the automotive industry saw an increase in sales to 17.3k units, a 32% year-on-year (YoY) growth and a 1% month-on-month (MoM) rise. Cumulatively, in 4MFY26, auto sales soared 46% YoY to 59.6k units, AHL mentioned. Syed Danyal Hussain of JS Global commented that the KSE-100 index closed the week at 161,935 points, up 1.5% week-on-week, while average trading volumes fell 13%. The market exhibited a slight uptick, driven by recovery in cement (+3%), exploration & production (+1%), and fertiliser (+6%) sectors.

Overall, sentiment remained fragile as tensions between Pakistan and Afghanistan escalated, with Kabul announcing plans to ban Pakistani imports within three months. During the week, the government successfully approved the 27th Constitutional Amendment. On the external front, the IMF has scheduled its executive board meeting for December 8 to consider releasing the third tranche of $1.2 billion under the ongoing loan programme.

The government is also seeking around $1 billion in policy-based financing from the World Bank and the Asian Development Bank, while preparations continue for issuing Eurobonds next year, Hussain mentioned. A $250 million Panda bond is also expected to be launched by year-end. Meanwhile, the government reported a budget surplus of Rs2.1 trillion in 1QFY26, equal to 1.6% of GDP. Sector-wise, automobile sales rose 33% YoY in Oct'25. The government also revived offshore exploration through a 23-block award round, the first such initiative in 18 years. Meanwhile, the State Bank's reserves inched up to $14.52 billion, he added.