KARACHI: Pakistan’s stock market may stay positive next week, with investors closely watching developments in the expected US-Iran talks potentially in Islamabad. Any progress could lift sentiment further and extend the recent rally.
The market still trades at attractive levels, with forward price-to-earnings near 7.4 times, leaving room for gains if confidence improves. Results season will also guide direction, while external inflows and policy signals remain key triggers.
According to AKD Research, market momentum stayed firm during the week, supported by easing geopolitical tensions, lower oil prices and an inflow of $2 billion from Saudi Arabia, along with a committed support package of $8 billion including rollovers.
The KSE-100 Index rose by 6,748 points, or 4.0 per cent week-on-week (WoW), to close at 173,939 points. Average daily traded volume increased to 1,264 million shares, up 37.6 per cent from the previous week. Sentiment improved after the prime minister announced fuel price cuts of Rs12 per litre for petrol and Rs135 per litre for diesel. Confidence also strengthened after adherence to the US-Iran ceasefire and confirmation of further talks.
Nabeel Haroon, vice president international equity sales at Topline Securities Ltd, said the index gained 4.0 per cent on a weekly basis as optimism grew over a possible peace deal between the US and Iran. He noted that Pakistan’s current account surplus widened sharply to $1,070 million in March, compared with $231 million in February. Car sales also showed strength. However, foreign direct investment slowed to $168 million. He added that individuals and local companies remained net buyers, while banks, foreign corporates and insurance firms sold equities during the week.
Sector activity remained strong. Fertiliser and automobile stocks led gains. Urea offtake rose 86 per cent year-on-year (YoY) to 569,000 tons in March, while other fertilisers also recorded strong growth. Auto sales reached about 19,100 units, driven by tractor demand. On the broader board, leather, textile weaving and vanaspati sectors posted the highest gains, rising up to 16.1 per cent WoW. Tobacco and woollen sectors saw slight declines.
Arif Habib Limited Research highlighted that the rally was backed by improving sentiment after the ceasefire and expectations of further diplomatic progress. The firm noted that Pakistan recorded its third consecutive monthly current account surplus of $1.07 billion. Large-scale manufacturing grew 6.5 per cent year on year in February, while banking deposits rose 18.6 per cent to Rs37.5 trillion. Power generation increased 6.0 per cent, while costs declined due to a better energy mix. Technology exports also grew 20 per cent year on year, reaching $413 million.
Syed Danyal Hussain of JS Research said the rally reflected easing geopolitical risks and improving external indicators. He pointed out that remittances supported the current account surplus, though the trade deficit widened to $2.4 billion. Foreign exchange reserves fell by $1.3 billion due to Eurobond repayments but were partly offset by Saudi inflows. He added that industrial activity remained stable, with large-scale manufacturing maintaining steady growth.
On the flows side, AKD Research noted that individuals and companies led buying with net purchases of over $10 million each. Banks and insurance companies remained net sellers. Among individual stocks, major gainers included GAL, GHNI, LOTCHEM, BOP and SRVI, while laggards included PTC, FATIMA, ATRL, MEBL and BNWM.
Looking ahead, analysts expect market direction to depend on diplomatic progress and corporate earnings. Stable macro indicators, improving liquidity and strong sector performance may support the upward trend, but external risks and policy signals will remain critical.
