KARACHI: The Pakistan Stock Exchange (PSX) opens today after a four-day long break due to Eid holidays. Market sentiment is expected to remain driven by Middle East geopolitical developments in the coming week. Investors will also watch closely for post-Ramazan trading activity and the upcoming inflation data.
AKD Research said any de-escalation in the conflict could spark a strong market rebound, as recent corrections have made valuations more attractive, with forward price-to-earnings now at 6.6 times.
Arif Habib Limited (AHL) Research noted the KSE-100 is currently trading at a price-to-earnings of 7.5 times and offering a dividend yield of around 6.8 per cent, with top picks including NBP, OGDC, PPL, FFC, LUCK, HUBC, PSO and ATRL.
The benchmark KSE-100 index declined 1,126 points, or 0.7 per cent, during the week to close at 152,740 points on Thursday. The market remained volatile throughout, as persistent Middle East military conflict drove swings in international oil prices and weighed on investor confidence.
Nabeel Haroon, vice president of international equity sales at Topline Securities, attributed the weekly decline primarily to further escalation of the Middle East conflict and its impact on energy prices. He noted that average daily traded volume also stood at 321 million shares.
Economic data released during the week offered broadly encouraging signals. Pakistan posted a current account surplus of $427 million in February 2026, highest since March 2025, compared with a deficit of $85 million in the same period last year and a surplus of just $68 million in January 2026. The improvement was driven primarily by higher workers’ remittances.
Large-scale manufacturing output grew 10.5 per cent year-on-year (YoY) in January 2026, led by the automobile and textile sectors, while power generation rose 11 per cent YoY in February, supported by lower tariffs and a shift of industrial consumers to the national grid. Technology exports reached $365 million in February, up 20 per cent YoY, accounting for 45 per cent of overall services exports.
In the treasury bill auction held during the week, the government raised Rs1,045.7 billion against a target of Rs700 billion. Yields rose by 51 to 100 basis points (bps) across all tenors, marking the first auction following the State Bank of Pakistan’s decision to hold its policy rate steady. Auto financing rose 35.3 per cent YoY to Rs337 billion in February 2026. Net foreign direct investment settled at $214 million in February, reversing a net outflow of $173 million in January, though cumulative net inflows for the first eight months of the fiscal year fell 33 per cent YoY to $1.195 billion. The Real Effective Exchange Rate eased to 102.54 in February from 103.29 in January. The Pakistani rupee edged up 0.02 per cent to 279.23 against the US dollar. Other key developments included Pakistan securing alternative fuel supplies from the Gulf, the Asian Development Bank unveiling a $10 billion financing strategy for Pakistan, and the government considering holding fuel prices steady until March 31.
Woollen textiles, synthetic and rayon, and closed-end mutual funds were the top-performing sectors, gaining 9.0 per cent, 6.0 per cent and 4.2 per cent respectively week-on-week. Leather and tanneries, commercial banks and miscellaneous sectors were the worst performers, declining 5.1 per cent, 5.0 per cent and 4.1 per cent respectively. Among individual stocks, PKGP surged 22.1 per cent, ABOT gained 10 per cent, IBFL rose 9.2 per cent, BNWM added 9.0 per cent and KOHC climbed 5.7 per cent. On the downside, NBP fell 12 per cent, AICL dropped 10.2 per cent, PABC declined 8.1 per cent, UNITY slipped 7.5 per cent and SRVI lost 6.7 per cent. Foreign investors and mutual funds were the main net sellers, offloading $9.3 million and $4.5 million respectively. Banks and individuals were the main buyers, with net purchases of $10.3 million and $7.4 million respectively.
