PSX surges 4% in holiday-shortened week

KSE-100 index adds 6,119 points on US-Iran ceasefire extension

KARACHI:

Pakistan's equity market closed the week on a strong note as investor sentiment improved amid easing geopolitical tensions following the extension of US-Iran ceasefire for 60 days.

The benchmark KSE-100 index surged 4% week-on-week to close at 173,963, gaining 6,119 points, in the shortest trading week of this year due to Eid holidays.

The PSX commenced the week with a strong session on Monday, where the KSE-100 soared 3,881 points (+2.31%) to close at 171,726. After a three-day holiday, the bourse witnessed another strong session on Friday, with the index advancing 2,238 points (+1.30%) to settle at 173,963.

Arif Habib Limited (AHL) noted that the KSE-100 index rose during the week as investor sentiment improved following the extension of US-Iran ceasefire for 60 days, easing concerns over potential oil supply disruptions and supporting overall equity market performance. The index closed at 173,963, up 4% WoW (+6,119 points). However, the week was shortened due to Eid holidays.

Motor spirit prices decreased by Rs6/litre to Rs409.78 with effect from May 23, despite an increase of Rs2.02/litre in ex-refinery prices, mainly due to a reduction of Rs6/litre in petroleum levy to Rs102.17 and a decline of Rs2.02/litre in inland freight equalisation margin. OMC margins remained unchanged at Rs7.87/litre.

High-speed diesel prices decreased by Rs6.8/litre to Rs402.78, primarily driven by a decline of Rs15.2/litre in ex-refinery prices, although the impact was partially offset by an increase of Rs6/litre in petroleum levy to Rs58 and a rise of Rs2.43/litre in IFEM to Rs3.49. OMC margins remained unchanged at Rs7.87/litre.

Oil and gas production showed improvement during the third week of May, with gas production rising by 3.4% WoW to 3,130 mmcfd, primarily driven by higher output from Uch and Kandhkot, while oil production increased by 1% WoW to 70,924 bpd. The United States and Iran agreed to extend their ceasefire by 60 days, pending President Donald Trump's approval, following Iran's attack on a US air base in Kuwait in response to recent US strikes.

Pakistan secured nearly $11 billion in external loans during the first 10 months of FY 2025-26, up 83% compared to the same period of last fiscal year, according to the Economic Affairs Division (EAD).

Pakistan secured its third Qatari LNG cargo as tanker Fuwairit safely crossed the Strait of Hormuz and entered Pakistani waters, with docking at the Engro LNG Terminal scheduled for Monday.

AHL further noted in its monthly report that the index gained 10,969 points in May'26, driven by progress in US-Iran talks, with Pakistan's role in facilitating diplomacy, supporting investor sentiment. Sentiment improved further towards the month-end after a 60-day extension of ceasefire, easing concerns over potential oil supply disruptions. Overall, the KSE-100 index delivered a strong return of 6.7% during the month, closing at 173,963 points. The Consumer Price Index for Apr'26 clocked in at 10.9% YoY (the highest since Jul'24) compared to 7.3% in Mar'26, AHL added.

Topline Securities highlighted that the KSE-100 index gained 6.7% month-on-month, which could be attributed to the ceasefire between the US and Iran where both sides showed restraint and also there had been progress on peace talks, resulting in improvement in investor confidence.

Major developments during the outgoing month were Pakistan's CPI for April clocking in at 10.9% compared to last month's 7.3%, the State Bank receiving $1.3 billion under the Extended Fund Facility and the Resilience and Sustainability Facility from the IMF, car sales for April coming in at 22,015 units (up 107% YoY and 42% MoM), monthly remittances reaching $3.5 billion (up 11% YoY but down 8% MoM) and the current account deficit hitting $324 million in Apr'26 vs surplus of $1,134 million in Mar'26, Topline said.