PSX powers ahead with gains of 5,336 points

Oil price relief, external financing optimism fuel stock buying despite geopolitical fears

KARACHI:

Investor sentiment continued to shift during the outgoing week at the Pakistan Stock Exchange (PSX), with easing oil prices, geopolitical developments and improving external financing prospects set market direction, while profit-taking and global uncertainty kept gains in check.

Despite that, the benchmark KSE-100 index ended the week on a highly positive note, gaining 5,336 points, or 3.03% week-on-week (WoW), to close at 181,430.

Day-on-day movements showed that the bourse opened the week on a positive note on Monday as investor optimism drove the KSE-100 higher by more than 2,100 points on the back of buying momentum across major sectors following a sharp decline in international oil prices. The index settled at 178,200, up 2,105.91 points, or 1.20%.

The following day, the PSX endured a topsy-turvy session, where the index reversed sharp early gains and closed lower due to broad-based profit-taking in heavyweight sectors and cautious global sentiment. It ended trading at 177,083, down 1,116.80 points, or 0.63%.

On Wednesday, stocks posted strong gains in an extensive rally, reclaiming the 180,000 level amid positive global cues and renewed optimism about Pakistan's external financing outlook. The KSE-100 added 2,931.71 points, or 1.66%, to close at 180,015.

The PSX extended its winning streak on Thursday as investors looked beyond lingering concerns over volatile oil prices and the fragile regional peace situation, betting instead on improving market sentiment and selective buying in heavyweight stocks. The benchmark index surged 1,761.66 points, or 0.98%, to 181,777.

On Friday, the market slipped into negative territory over cautious investor sentiment and fears of an escalation in the Middle East conflict, which triggered selling across major sectors. Resultantly, the index fell 346.57 points, or 0.19%, and closed the week at 181,430.

Arif Habib Limited Deputy Head of Trading Ali Najib, in his review, wrote that the KSE-100 index ended the week on a positive note, gaining 5,336 points (+3.03% WoW) to close at 181,430. During the week, the index traded between the intra-day high of 182,007 and the intra-day low of 177,043 as easing geopolitical tensions and improving investor sentiment sustained the market's upward momentum.

AKD Securities wrote that the stock market witnessed positive momentum during the week on hopes of a deal between the US and Iran. This, coupled with Iran-Oman talks aimed at restoring the Strait of Hormuz to its pre-conflict position, drove oil prices below $80 per barrel, before they settled slightly higher at $82 on Friday.

Moreover, robust financial results from banks bolstered sentiment, with the sector adding 1,919 points during the week, while Pakistan's trade deficit for July shrank 15% month-on-month to $3.9 billion, led by higher exports. "We expect the market to improve further on strengthening economic indicators, easing geopolitical tensions and favourable financial results for June 2026," it said.

Topline Securities attributed the 3% WoW growth to optimism that the US, Iran and Oman may announce a 60-day agreement on shipping through Hormuz. Major events during the week were July 2026 inflation coming in at 9.20% compared to June's reading at 11.07%. Trade deficit for July hit nearly $4 billion, up 25% year-on-year but down 15% MoM, while the T-bill auction raised Rs882 billion for the government, where yields dipped in the range of 4-10 basis points.

It mentioned that mutual funds were largely buyers in the stock market, which made net equity purchases of $14 million. On the other hand, individuals and banks were the major sellers, selling equities worth a net $11 million and $9 million respectively.