RECORDER REVIEW
KARACHI: The Pakistan Stock Exchange capped off a historic week, with the benchmark KSE-100 Index closing at an all-time high of 141,035 points, up 1.3 percent on a weekly basis.
The index also touched a new intraday record of 141,161 points, underscoring a remarkable reversal in market sentiment that was largely driven by an unexpected breakthrough in trade relations with the United States and renewed investor confidence in Pakistan’s macroeconomic trajectory.
BRIndex100 increased by 114.82 points last week, closing at 14,422.25 points. This is up from 14,307.43 points the previous week. On average, 423.720 million shares were traded daily for BRIndex100. BRIndex30 also rose by 107.86 points over the week, ending at 14,307.43 points while it ended up the previous week at 14,199.57 points. The average daily trading volume for BRIndex30 during the week remains 457,672 million shares.
After beginning the week on a tepid note, with the market largely range-bound amid anticipation surrounding June quarter corporate earnings, a sharp rebound was triggered in the final two sessions. Investors returned in force following the announcement of a landmark US-Pakistan trade agreement aimed at exploiting Pakistan’s untapped oil reserves. The development, widely viewed as a strategic economic lifeline, unleashed a rally in exploration and production (E&P) and oil marketing companies (OMCs), which outperformed all other sectors by week’s end.
Equity analysts said the market was not just reacting to the symbolism of the trade pact but also to the tangible implications of reduced trade barriers. The United States revised its tariff regime for Pakistani exports, slashing duties from 29 percent to 19 percent, effective August 2025—a decision that market participants interpreted as a game-changing shift in bilateral economic ties. “This is a defining moment for Pakistan’s external trade framework. The tariff revision and energy cooperation framework offer both short-term relief and long-term structural opportunity,” remarked Syed Amir Hussain, senior analyst.
Simultaneously, monetary policy played a reinforcing role. The State Bank of Pakistan, in a move that defied market expectations of a 50–100 basis point rate cut, opted to maintain the policy rate kept at 11 percent. The decision signalled confidence in the central bank’s inflation management framework, especially as headline inflation rose to 4.1 percent in July from 3.2 percent in June—largely due to a fading base effect rather than structural inflationary pressures. According to analysts, the central bank’s neutral stance helped anchor financial sector expectations and encouraged longer-term positioning in equities.
Fiscal performance also provided a tailwind, with the Federal Board of Revenue exceeding its tax collection target for July by Rs7 billion, reaching a total of Rs755 billion. However, concerns persisted over the government’s reversal of the Rs 7.41/unit power tariff relief announced earlier this year, a move seen as backtracking on fiscal support measures amid a fragile energy landscape.
However, despite the bullish close, foreign exchange reserves declined by $153 million to $14.3 billion, underscoring the vulnerability of the external account to debt repayments and highlighting the delicate balance policymakers must maintain.
Even with these mixed signals, investor appetite remained robust. The average daily traded volume for the week stood at 562 million shares, slightly lower by 11.6 percent compared to the previous week’s 625 million shares. However, traded value surged significantly to Rs 36 billion, up 25.3 percent, reflecting selective accumulation in heavyweight stocks.
Sector performance was led by oil and gas, where E&Ps rallied 8.1 percent and OMCs advanced 5.2 percent. The tech and communications sector also posted solid gains of 3.9 percent, while cement and pharmaceuticals added 3.1 and 2.6 percent respectively. Among the week’s top-performing stocks were Bestway Cement, up 14.2 percent, OGDC gaining 13.2 percent, and Systems Ltd rising 11.3 percent. Other notable gainers included Pakistan Petroleum Ltd, Pakistan State Oil, and POL, all benefitting from the energy-driven momentum.
On the downside, Engro Polymer saw the steepest loss, shedding 11.4 percent, followed by notable declines in (Bannu Woollen Mills Limited) BNWM, Javedan Corporation, and Mughal Steel. The textile and engineering sectors underperformed overall, reflecting ongoing uncertainty around energy costs and export competitiveness.
The broader market capitalization also advanced by 1.3 percent in tandem, reaching Rs16.9 trillion, with the dollar-based value touching $59.8 billion as compared to Rs16.68 trillion at the end of the previous week.
Looking ahead, analysts see room for continued upside, provided macroeconomic and geopolitical stability endures. With second-quarter corporate earnings expected to peak in the coming weeks and the implementation of the US trade deal on the horizon, institutional interest is likely to deepen, especially in export-oriented and energy-linked counters.
In summary, the week marked a critical inflection point for the PSX, where trade diplomacy, policy restraint, and sectoral strength combined to deliver a record-setting performance. Investors are now closely watching for consistency in fiscal support, smooth execution of trade benefits, and resilience in corporate earnings to validate this upward trajectory.
