PSX breaks 141k barrier in volatile week
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The benchmark KSE-100 index at the Pakistan Stock Exchange (PSX) closed at a historic high of 141,035 points in the outgoing week, gaining 1,828 points (+1.3% week-on-week – WoW), driven by optimism about a new US-Pakistan trade agreement that cuts tariffs and boosts investment. The rally was led by oil and export goods-related stocks.
Despite inflation rising to 4.1% in July, the SBP kept its policy rate unchanged at 11%. The rupee appreciated slightly to 282.72 against the US dollar, while State Bank's reserves fell $153 million to $14.3 billion.
During the week, the Federal Board of Revenue (FBR) beat its tax collection target, receiving Rs754 billion in July (+14% year-on-year – YoY). Meanwhile, petrol prices dropped Rs7.54 per litre and high-speed diesel rose Rs1.48/litre.
With corporate result season in full swing and attractive market valuations, sentiment is expected to stay positive, said analysts.
On a day-on-day basis, another attempt went in vain on Monday, when the PSX failed to close above the key psychological level of 140,000. The KSE-100 index ended the day at 139,380, up 173 points.
The market witnessed a profit-taking-cum-sector switching day on Tuesday ahead of monetary policy meeting on July 30. The index closed at 137,965, down 1,415 points.
On Wednesday, the SBP surprised markets by holding policy rate at 11%, triggering a sharp dip in the KSE-100 index to the intra-day low of 137,659. However, renewed buying in banking blue-chips helped the index rebound, which closed up 447 points at 138,412.
The stock market saw sharp swings on Thursday, rising to intra-day high of 140,215 (+1,802 points) and dipping to intra-day low of 139,084 (-672 points). The index eventually settled at 139,390, posting a net gain of 978 points.
A strong surge in energy stocks pushed the index to a new all-time high of 141,035 on Friday, up 1,645 points. The rally was fuelled by prospects of collaboration between Pakistan and the US in oil exploration and expected circular debt payments next week.
Arif Habib Limited (AHL) wrote in its weekly review that the KSE-100 index extended its upward trajectory during the outgoing week, closing at an all-time high of 141,035, a WoW increase of 1,828 points. The rally was driven by renewed optimism about international cooperation and the ongoing results season.
Pakistan and the US on Thursday signed a new trade agreement, which is expected to reduce tariffs and boost bilateral investment, AHL mentioned. The State Bank, however, held its policy rate steady at 11%, citing concerns about the inflation outlook and the widening trade deficit.
It pointed out that the price of petrol decreased Rs7.54 to Rs264.61/litre, while the price of diesel increased Rs1.48 to Rs285.83/litre, effective from August 1.
The Consumer Price Index (CPI) for July stood at 4.1% YoY compared to 3.2% in June. Tax collection rose 14% YoY to Rs754 billion during July, exceeding the target of Rs748 billion. Meanwhile, the Pakistani rupee appreciated marginally by 0.3% WoW, closing at 282.72 to a dollar, added AHL.
JS Global analyst Syed Danyal Hussain commented that after a weak start to the week, the PSX rebounded sharply in the last two sessions, closing at 141,035 points, up 1.3% WoW. The index also touched a new high of 141,161 points during the week. Average daily turnover decreased 12% WoW.
The rebound was primarily driven by a historic US deal aimed at tapping Pakistan's oil reserves, which triggered a strong rally in oil stocks. Sentiment was further supported by the US reducing tariffs on Pakistan's exports to 19% from the previously announced 29% in April 2025, effective from August 2025, Hussain said. On the economic front, the State Bank kept its policy rate unchanged at 11% against market expectations of a reduction, he added.
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