Year-opening buying lifts PSX to peak

KSE-100 index surges 4% WoW, or 6,634 points, in strong start to 2026

KARACHI:

The benchmark KSE-100 index extended its bullish run in the new year to a fresh record, gaining nearly 4% on a week-on-week basis, as strength in banking, energy and fertiliser stocks drove broad-based participation, according to market analysts.

On a day-on-day basis, the Pakistan Stock Exchange (PSX) recorded another robust session on Monday, with the KSE-100 index closing at a new all-time high of 173,896, marking a gain of 1,496 points (+0.87%).

The bourse continued its positive momentum as the index closed on a strong note on Tuesday at a fresh all-time high of 174,472, gaining 576 points, as bullish momentum remained intact throughout the session.

On Wednesday, the PSX signed off a standout 2025 on a historic note, during which the KSE-100 soared to unprecedented highs above the 174,000 mark. On the last day of the year, however, the market registered a modest correction, falling 418 points, or 0.24%, to settle at 174,054.

Next day, the new year kicked off on a strong note as the index gained 2,301 points (+1.32%), reflecting continued investor optimism, and closed the day at 176,355. The PSX continued to witness strengthened bullish momentum on Friday as the KSE-100 closed at 179,035, up 2,679 points (+1.52%).

Arif Habib Limited (AHL) noted that the KSE-100 index climbed from 172,401 last week to 179,035 this week, surging 6,634 points (+3.9% WoW), supported by year-opening buying interest.

GDP growth in 1QFY26 clocked in at 3.71%, improving from 1.56% in 1QFY25 but moderating from 6.17% in 4QFY25, driven by robust industrial growth of 9.4%, alongside agricultural and services expansion of 2.9% and 2.4%, respectively.

During Dec'25, oil marketing companies' (OMC) sales rose 6% YoY to 1.35 million tons, although volumes declined 5% MoM. On a cumulative basis, 1HFY26 OMC offtake reached 8.16 million tons, reflecting a 2% YoY increase, said AHL.

Overall refinery sales edged up 0.9% YoY in Dec'25, supported by stronger motor spirit and furnace oil offtake, which offset weaker high-speed diesel demand. Diesel sales fell 8.6% YoY to 396k tons, likely due to higher OMC imports amid a declining price environment and heightened cross-border tensions. In contrast, furnace oil sales increased 11.1% YoY to 227k tons, primarily fuelled by higher refinery exports, albeit at a loss.

The price of motor spirit declined Rs10.28/litre to Rs253.17/litre, reflecting a Rs11.09/litre reduction in the ex-refinery price, alongside a Rs0.81/litre increase in the inland freight equalisation margin (IFEM).

The price of high-speed diesel fell Rs8.57/litre to Rs257.08/litre, following a Rs9.59/litre cut in the ex-refinery price and a Rs1.02/litre increase in IFEM.

The Consumer Price Index (CPI) for Dec'25 clocked in at 5.6% YoY compared to 6.1% in Nov'25. The State Bank-held reserves rose by $12.6 million to $15.9 billion, while commercial bank reserves fell $23 million to $5.1 billion, added AHL.

Syed Danyal Hussain of JS Global noted that the KSE-100 extended its bullish run into the new year, closing at a record 179,034 points, up 4% WoW. The weekly rally was broad-based, led by banks (45% contribution), followed by exploration & production (18%) and fertiliser (13%). Market activity strengthened, with average daily turnover rising 41% WoW.

Pakistan's economy expanded 3.71% in 1QFY26, according to the National Accounts Committee, driven primarily by a 9.38% YoY increase in industrial output, alongside agriculture (+2.89%) and services (+2.35%). In another positive development, the CPI clocked in at 5.6% for Dec'25, a 0.5% MoM decline, he said.

On the external front, the trade deficit widened to $3.7 billion in Dec'25, up 24% YoY, largely reflecting a 20% drop in exports, while imports edged up 2%. This took the cumulative 1HFY26 trade deficit to $19.2 billion, an increase of 35% YoY.

At the corporate level, PTCL completed the acquisition of Telenor Pakistan and Orion Towers, marking a key consolidation move in the telecom sector. Meanwhile, forex reserves remained steady, with the State Bank reporting reserves of $15.91 billion, added Hussain.