KARACHI: The stock market may see measured activity in the coming week as Ramazan begins and investors adopt a cautious stance. Analysts expect short sessions and subdued participation to keep the momentum in check. However, the ongoing corporate result season may lend support if earnings surprise on the upside.
Key economic indicators, especially trade and current account data, will remain in focus. Any improvement in these numbers could help stabilise sentiment and limit downside. The benchmark index is trading at a price-to-earnings ratio of about 9.1 times and offers a dividend yield near 6.7 per cent, leaving valuations attractive for long term investors.
Research issued by Arif Habib Limited noted that the KSE-100 index remained bearish during the week, losing 8,920 points to close at 179,604, down 2.46 per cent week-on-week (WoW). The decline followed selling pressure, mixed corporate earnings and volatility linked to concerns surrounding the Reko Diq project.
The brokerage said investors engaged in profit taking after recent gains, while uncertainty over macro triggers kept fresh buying limited.
Moody’s, the global ratings agency, revised Pakistan’s banking outlook from positive to stable, signalling that while macro indicators are improving, recovery remains gradual.
Remittances from overseas Pakistanis rose 15 per cent year-on-year (YoY) to $3.5 billion in January 2026, though they slipped 4 per cent month on month. Automobile sales showed strength, reaching about 23,000 units in January, reflecting a sharp monthly rebound, according to data from Pakistan Automotive Manufacturers Association. Meanwhile, changes in the February review by the MSCI led to the removal and inclusion of several Pakistani equities, prompting portfolio adjustments.
Energy sector data remained weak. Gas production fell 7.8 per cent WoW to 2,798 million cubic feet per day, while oil output dropped 11.7 per cent to 59,121 barrels per day in early February. Central government debt increased 1.3 per cent month-on-month (MoM) to Rs78.5 trillion as of December 2025, showing a 9.6 per cent annual rise.
Foreign exchange reserves held by the State Bank of Pakistan (SBP) edged up by 20.6 million dollars to 16.18 billion dollars, providing import cover of 2.53 months. The rupee stayed largely stable and appreciated slightly to 279.62 against the dollar.
Sector performance remained mixed. Banks, exploration and production, technology, fertiliser and power dragged the index lower. Investment banks and pharmaceuticals offered modest support. On the stock front, ENGROH, FFC, AGP, INDU and MCB added points, while OGDC, PPL, UBL, EFERT and BAHL weighed heavily on the benchmark.
Nabeel Haroon, vice president international equity sales at Topline Securities, attributed the weekly fall to result driven profit taking. He highlighted that mutual funds, local companies and individual investors were net buyers, cumulatively purchasing tens of millions of dollars in equities, while foreign corporates and insurance firms remained net sellers. Average daily trading volumes declined 15 per cent to about 862 million shares, with traded value falling to roughly 152.2 million dollars.
Wadee Zaman of JS Research said investor sentiment stayed cautious amid geopolitical and security concerns linked to developments in Balochistan. He added that macro indicators such as remittance growth and a primary fiscal surplus provided some reassurance, though uncertainty kept risk appetite contained.
Overall, the market entered a consolidation phase after recent gains. Lower participation during Ramazan may keep trading range bound. Still, stable macro signals, steady inflows and earnings announcements could offer selective opportunities for investors in the week ahead.
