KARACHI: Pakistan’s equity market may recover next week if the IMF review goes well and tensions between the US and Iran ease. Investors will watch the policy talks in Islamabad and the direction of oil prices. The KSE-100 index fell 1.5 per cent last week, as uncertainty over the US-Iran conflict and high energy prices hurt sentiment.
ADK Research said it expects the market to improve on the back of stronger economic indicators. It called the IMF review a key near-term catalyst. The brokerage added that a possible US-Iran deal can bring international oil prices down from their elevated levels. It also noted that the market still trades at attractive valuations, with a forward price-to-earnings ratio of 7.2 times.
The benchmark index lost 2,610 points to close at 168,155 points. Topline Sales Desk said weak investor interest drove the fall, as there was no positive news on US-Iran relations. Oil stayed high for most of the week and touched $105.3 per barrel. Supply chain worries and China’s suspension of oil product exports outweighed the recovery in Gulf crude flows. Brent crude later eased to $99.5 per barrel, as the US pressed Europe to release diesel stocks.
Trading activity slowed. ADK Research said average daily traded volume fell 45 per cent to 647 million shares. Topline said average daily traded value fell 17 per cent to Rs18.7 billion.
At home, fuel prices moved in different directions. High-speed diesel dropped Rs12.8 per litre, or 3.1 per cent, to Rs399. Motor spirit rose Rs1.4 per litre, or 0.35 per cent, to Rs391.
The economic data offered some relief. Inflation eased to 10.26 per cent in September from 11.15 per cent in August, as food prices cooled. It was still well above the 5.76 per cent recorded a year earlier. The trade deficit widened to $3.6 billion, up 6 per cent from a year ago and 8.0 per cent from August.
The IMF mission began formal talks in Islamabad on the fourth review under the Extended Fund Facility and the third review under the Resilience and Sustainability Facility. A successful outcome would unlock $1.2 billion. The Federal Board of Revenue collected Rs3.1 trillion in the first quarter of the fiscal year, Rs13 billion above the IMF target.
Yields rose at the Treasury bill auction. The State Bank raised Rs853 billion, and cut-off yields climbed by 61 basis points for three-month papers, 75 for six-month papers and 45 for 12-month papers. Topline said yields rose by 49 to 75 basis points across tenors.
Other news also shaped the week. The finance minister discussed possible US Export-Import Bank financing for Boeing aircraft, refinery upgrades and Reko Diq. The central bank’s foreign exchange reserves stood at $21.4 billion on September 25, up $39 million from the previous week. Its net interventions in June were $841 million, with purchases of $8.1 billion in fiscal 2026. The government raised Rs46 billion and Rs72 billion in fixed and variable-rate Hybrid Sukuk auctions. It also plans to buy at least 25 to 26 LNG cargoes for winter gas demand.
Among sectors, vanaspati and allied industries gained 10.7 per cent, synthetic and rayon rose 2.9 per cent, and modarabas added 2.3 per cent. Power fell 2.1 per cent, investment companies lost 1.9 per cent and paper and board declined 1.9 per cent.
Companies and individuals were the main net buyers, with $5.2 million and $4.5 million. Mutual funds and brokers sold $6.1 million and $2.3 million. SSOM rose 13.6 per cent, BML gained 4.1 per cent and ATRL added 3.8 per cent. PSEL fell 12 per cent, FHAM dropped 10.9 per cent and NPL lost 9.4 per cent.
