PSX gains 2,248 points in mixed week

KSE-100 index advances on diplomatic optimism, strong IPO demand

KARACHI:

Pakistan Stock Exchange (PSX) extended gains during the outgoing week, when the benchmark KSE-100 index rose over 2,248 points amid easing geopolitical concerns linked to expected progress in US-Iran negotiations and improving investor confidence.

On a day-on-day basis, the bourse commenced the week with a plunge of nearly 3,800 points, triggered by stalled US-Iran peace negotiations, which pushed crude prices above $110.91 per barrel. On Tuesday, the index oscillated between the intra-day high of 164,309.65 and the low of 162,563.58. At close, it posted a handsome rise of 1,091.66 points, or 0.67%, to settle at 162,896.68.

On Wednesday, the PSX witnessed a stable session, closing at 164,831, up 1,935 points (+1.19%). The market remained robust on Thursday, where the index closed at 168,514, up 3,683 points (+2.23%). It ended the week with a mixed session as the KSE-100 settled at 167,844, down 670 points (-0.40%).

Arif Habib Limited (AHL), in its weekly report, noted that the KSE-100 index rose during the outgoing week, driven by improved geopolitical sentiment on expectations of progress in US-Iran talks, supported by Pakistan's role in facilitating backchannel diplomacy. It eased concerns over potential oil supply disruptions and supported equity market performance, with the index closing at 167,844, up 1.36% week-on-week (+2,248 points).

 

AHL mentioned that the initial public offering of Service Long March Tyres created history at the PSX, which attracted Rs70 billion investment with a record 16.7x oversubscription, reflecting exceptional market demand. Among key economic data, auto financing showed a strong recovery, increasing 36.6% year-on-year to Rs360 billion in Apr'26 and rising 4.1% month-on-month, supported by improving consumer sentiment.

During the week, the government exceeded the Pakistan Investment Bond (PIB) auction target, raising Rs652 billion against expectation of Rs350 billion, with strong participation and major allocation in the 15-year PIB. Pakistan posted a current account deficit of $252 million in 10MFY26 versus a surplus of $1,662 million in the same period of last year, while Apr'26 recorded a deficit of $324 million compared to a surplus of $1,134 million in Mar'26. Oil and gas production declined, with gas output falling 3.2% WoW to 3,028 million cubic feet per day and oil production dropping 1.9% WoW to 70,215 barrels per day due to lower field output. Power generation fell 10% YoY to 9,499 gigawatt hours in Apr'26, while DISCOs requested a fuel cost adjustment of Rs1.72/kWh amid higher fuel-based generation. Meanwhile, foreign exchange reserves surged, reaching $17.1 billion from $15.9 billion, led by a $1.2 billion spike in State Bank reserves, with import cover growing to 2.7 months, AHL said.

Syed Danyal Hussain of JS Global commented that the KSE-100 increased 1.4% (+2,248 points) during the week amid improved investor sentiment driven by prospects of easing geopolitical tensions. Brent crude prices dipped to $103/barrel (-6% WoW). On the macroeconomic front, Pakistan's current account reverted to a deficit of $324 million in Apr'26, primarily due to a widening trade gap, led by higher energy imports, taking the cumulative 10MFY26 deficit to $252 million.

Meanwhile, the country's trade deficit exceeded $4 billion in Apr'26, marking the highest monthly deficit in 46 months, as imports increased 7% YoY and the oil import bill hit a 44-month high. Consequently, the cumulative trade gap widened to $32 billion, up 20% during 10MFY26. In parallel, the IMF concluded its visit following constructive discussions with Pakistani authorities, while the government reaffirmed its commitment to achieving a primary surplus target of 2% of GDP in FY27. Separately, the Real Effective Exchange Rate rose to a seven-year high of 105.8 in Apr'26. In the latest T-bill auction, the government raised Rs702 billion against the target of Rs450 billion, while yields increased 9 to 86 basis points across different tenors, Hussain said.