Policy rate status quo triggers PSX rebound

Pakistan Stock Exchange (PSX) staged a modest rebound on Tuesday as the benchmark KSE-100 index gained 1,421.67 points, or 0.85%, to settle at 169,392.33, driven by renewed buying across key sectors and improved investor sentiment.

The index moved between the intra-day high of 169,988 and low of 169,189, during which investors rebuilt positions in index-heavy stocks and helped fuel a broad recovery across the market.

The rebound was aided by emerging confidence after the State Bank of Pakistan (SBP) decided on Monday to keep its policy rate unchanged at 11.5%. The decision eased concerns over an unexpected monetary policy shift and lent support to rate-sensitive shares.

Buying was seen across auto assemblers, cement producers, commercial banks, oil and gas exploration firms, refineries, power generation and oil marketing companies, which signalled widespread participation in the recovery.

The market regained some of the recent lost ground despite lingering uncertainty surrounding the US-Iran conflict and heightened risks to regional oil supplies. Crude prices rose nearly 2% on Tuesday as concerns over supply disruptions persisted after attacks on Saudi energy infrastructure left the kingdom's East-West pipeline offline and cast doubt on efforts to reduce shipping risks in the Gulf.

According to Ahmed Sheraz, equity trader at KASB KTrade, the stock market maintained a positive tone throughout the session. It was well supported by commercial banks, cement, pharmaceutical and oil & gas stocks, reflecting broad-based buying interest across key sectors.

Individually, UBL, Fauji Fertiliser, Lucky Cement and Bank Alfalah were among the notable positive contributors, helping sustain the index's upward momentum. The bourse also took cue from the improving sentiment in global markets, which provided a favourable backdrop for local equities.

Overall, the session reflected renewed confidence after the SBP's rate hold, with spreading buying across multiple sectors. Going forward, Sheraz said global sentiment, oil prices and macroeconomic developments would remain the key triggers.

Arif Habib Limited Deputy Head of Trading Ali Najib said investors opted for selective buying across auto assemblers, cement firms, commercial banks, E&P companies, refineries, power firms and OMCs, following the SBP's decision to leave the policy rate unchanged at 11.5%.

On the corporate front, Mughal Iron & Steel Industries reported a 2.6-time year-on-year rise in profit to Rs2,487 million in fiscal year 2026, with earnings per share at Rs7.41, driven by improved margins, lower finance costs and higher other income. The company declared a dividend per share of Rs2 after a hiatus of two years.

UBL, Fauji Fertiliser, Lucky Cement, Bank Alfalah, Pakistan Services, Pakistan Oilfields, Engro Holdings, Bank AL Habib, MCB and Systems Ltd emerged as major gainers, collectively adding 1,024 points to the index. Najib expects market activity to remain volatile, with selective profit-taking and stock-specific moves expected amid the ongoing result season.

Overall trading volumes decreased to 372 million shares compared with Monday's tally of 570.5 million. The value of traded shares stood at Rs17.2 billion.

In the ready market, shares of 494 companies were traded. Of these, 280 stocks closed higher, 166 fell and 48 remained unchanged.

Cnergyico Pk was the volume leader with trading in 56.2 million shares, remaining unchanged at Rs12.81. Foreign investors bought shares worth Rs143 million, the National Clearing Company reported.