KARACHI: Pakistan equities posted a strong recovery during the outgoing week as easing geopolitical tensions in the Middle East and improving domestic economic indicators, significantly boosted investor confidence, helping the benchmark KSE-100 Index gain 4 percent in a holiday-shortened trading week.
The benchmark KSE-100 Index surged by 6,119 points on a week-on-week basis to close at 173,963 points, as investors welcomed the extension of the United States-Iran ceasefire for another 60 days, a development that eased concerns over potential disruptions to global oil supplies and reduced fears regarding the security of shipping routes through the Strait of Hormuz.
The positive geopolitical backdrop encouraged aggressive buying across major sectors and supported a broad-based market rally.
Market sentiment received additional support from encouraging macroeconomic developments. According to data released by the Economic Affairs Division, Pakistan secured nearly USD 11 billion in external financing during the first ten months of FY26, representing an increase of 83 percent compared with the corresponding period of the previous fiscal year.
Investor confidence was further strengthened after Pakistan successfully received its third LNG cargo from Qatar, with the tanker Fuwairit safely crossing the Strait of Hormuz and docking at the Engro LNG Terminal.
The local currency remained largely stable during the week, closing at Rs278.50 against the US dollar compared with Rs278.52 a week earlier, reinforcing confidence in the country’s external sector stability.
Developments in the energy sector also remained supportive. Effective May 23, the government reduced petrol prices by Rs6.00 per litre to Rs409.78 per litre, while high-speed diesel prices were lowered by Rs6.80 per litre to Rs402.78 per litre.
The reduction came despite changes in ex-refinery prices, largely due to adjustments in petroleum levy and inland freight equalization margins. Meanwhile, domestic hydrocarbon production showed improvement during the third week of May, with gas output increasing 3.4 percent week-on-week to 3,130 million cubic feet per day and oil production rising 1.0 percent to 70,924 barrels per day.
The market rally was led by heavyweight sectors. Commercial banks emerged as the largest contributor to the benchmark index, adding 1,654 points, followed by fertilizer stocks which contributed 1,074 points.
Cement companies added 975 points, investment banks and companies contributed 576 points, while exploration and production companies accounted for another 453 points. Refinery stocks were the only sector to record a negative contribution, trimming a marginal 3.93 points from the benchmark index.
Among individual companies, Fauji Fertilizer Company remained the single largest contributor to market gains, adding 893 points to the benchmark index. Other major contributors included Engro Holdings with 549 points, Lucky Cement with 481 points, Habib Bank Limited with 356 points and Bank AL Habib with 316 points.
On the downside, minor negative contributions came from Colgate-Palmolive, Systems Limited, Standard Chartered Bank Pakistan, Shifa International Hospitals and Attock Refinery.
Trading activity remained robust throughout the week. Average daily traded volume increased 6.6 percent to 531 million shares, while average daily traded value surged 50 percent to $129 million, reflecting stronger investor participation and improved liquidity. Total market capitalization of the Pakistan Stock Exchange increased by 3 percent to Rs19.17 trillion, equivalent to approximately USD 69 billion.
The Bank of Punjab led the volume chart with average daily trading of 25.6 million shares, followed by WorldCall Telecom with 22.7 million shares, TRG Pakistan with 20.1 million shares, Maple Leaf Cement Factory with 18.3 million shares and First National Equities Limited with 18.2 million shares.
Among the major gainers during the week were Tariq Glass Industries, TRG Pakistan, Honda Atlas Cars, Thal Limited and Power Cement, while Cnergyico Pakistan, Attock Petroleum, Pakistan Petroleum Limited, Systems Limited and Attock Refinery emerged among the notable laggards.
The Business Recorder indices mirrored the broader market’s positive performance. The BRIndex100 advanced from 18,414.34 points to 19,269.29 points, posting a gain of 854.95 points during the week. Total turnover in the index stood at 799.66 million shares, translating into an average daily turnover of nearly 159.93 million shares.
Similarly, the BRIndex30 climbed from 67,360.06 points to 69,982.14 points, registering a gain of 2,622.08 points, while cumulative turnover reached 534.03 million shares, averaging approximately 106.81 million shares per trading day.
An analysis of investor flows showed strong support from domestic institutions. Local investors recorded net purchases of USD 14.14 million during the week, led by insurance companies with net buying of USD 13.41 million and banks and DFIs with purchases of USD 11.09 million. Individual investors also remained net buyers with purchases of USD 3.95 million.
Domestic buying was concentrated in commercial banks and cement stocks, which attracted net inflows of USD 6.24 million and USD 4.51 million, respectively.
Foreign investors; however, remained net sellers during the week, recording a net outflow of USD 2.56 million. Overseas investors sold shares worth USD 1.96 million, while foreign corporates offloaded equities worth USD 0.59 million. Foreign selling was concentrated in commercial banks, oil marketing companies and cement stocks, although selective buying was observed in fertilizer and exploration and production companies.
Looking ahead, analysts expect market performance to remain stable as investors await greater clarity on fiscal measures ahead of the federal budget. Continued progress on the diplomatic front between the United States and Iran is expected to support sentiment, while attention will increasingly shift toward economic policy announcements and budget-related developments.
Analysts say the benchmark KSE-100 Index is currently trading at an attractive price-to-earnings ratio of 8.1 times and offers a dividend yield of approximately 6.3 percent.
Copyright Business Recorder, 2026