Year-opening buying lifts PSX to peak
Foreign funds would divert their liquidity into buying Pakistan’s stocks. This would merely increases prices of shares and be profitable for those who already hold stocks. PHOTO: FILE
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.