PSX climbs 0.36% amid easing oil prices

The KSE-100 index of the Pakistan Stock Exchange (PSX) closed the three-day week at 179,571, gaining 649 points, or 0.36% week-on-week, as the easing of geopolitical tensions and the passage of FY27 budget lifted investor sentiment.

On a day-on-day basis, the PSX witnessed a range-bound session on Monday, with the KSE-100 declining 451 points (-0.25%) to close at 178,472. During the trading session, mixed investor sentiment prevailed, with participants largely lacking a clear directional bias.

The market experienced another directionless session on Tuesday, when the index fell 779 points (-0.44%) and closed at 177,693. During the day, the KSE-100 registered early gains and touched the intra-day high of 179,406 before profit-taking erased most of the advance.

The bourse, however, enjoyed a strong session on Wednesday, rising 1,878 points (+1.06%) to settle at 179,571. Broad-based buying emerged as investors positioned themselves for further positive developments on the geopolitical front, expected another reduction in domestic petroleum prices and anticipated monetary easing.

Arif Habib Limited (AHL) reported that the KSE-100 index closed at 179,571 points, up 0.36% WoW (+649 points). The advance was primarily driven by the signing of a peace agreement and broader geopolitical easing. The market remained positive despite being a rollover week.

The price of motor spirit (MS) was slashed by Rs74.28 to Rs299.50 per litre, driven by a reduction of Rs33.79 in the ex-refinery price and a decrease of Rs40.49 in petroleum levy, while the inland freight equalisation margin (IFEM) remained unchanged at Rs2.87.

The price of high-speed diesel (HSD) fell Rs67.31 to Rs311.47 per litre, primarily due to a reduction of Rs87.02 in the ex-refinery price, partially offset by an increase of Rs19.71 in petroleum levy, while the IFEM stood unchanged at Rs2.40.

AHL mentioned that in the T-bill auction, the government raised Rs1,242.8 billion against the target of Rs1,200 billion, with cut-off yields declining across all tenors by 39 to 115 basis points. The largest allocation was made in the 12-month tenor, which attracted Rs624.3 billion.

Under the approved Finance Bill 2026, the super tax was abolished for companies deriving more than 80% of their turnover from exports. Meanwhile, Oil and Gas Development Company commenced gas production from the Sahito-1 discovery well under the Khewari exploration licence. Mari Energies also started gas production from the Shams-1 well, making a positive addition to the domestic gas output.

During the week, the Pakistani rupee appreciated slightly against the US dollar, strengthening 0.02% to close at Rs278.20/$, AHL added.

AKD Securities reported that market activity remained volatile during the shortened trading week, as the benchmark KSE-100 index declined through the first two trading days before recovering in the final session to close at 179,571 (+0.4% WoW). Market participation (average daily turnover) increased to 1.5 billion shares vs 1.4 billion in the prior week. On the positive side, the US and Iran formally agreed on a 60-day roadmap towards a final deal, sustaining the recent downward momentum in international oil prices, which extended their decline on expectations of smoother crude flows through the Strait of Hormuz.

Sentiment was further aided by the Iranian president's visit to Islamabad. Furthermore, the National Assembly passed the Rs18.8 trillion expansionary FY27 budget, broadly favourable for key sectors such as cement, steel, refineries, textile, pharma, and technology, alongside reduction/elimination of super tax for individuals and corporates.

On the consumer front, petroleum prices were revised downwards, with MS and HSD cut by Rs74/litre and Rs67/litre, respectively. In the T-bill auction, cut-off yields fell sharply across all tenors. Moreover, broad money (M2) rose 9.2% in the current financial year to Rs44.2 trillion, fuelled primarily by a 2.8% WoW increase in scheduled bank deposits.