RECORDER REVIEW

KARACHI: The Pakistan Stock Exchange (PSX) concluded the outgoing week on a firmer footing as a strong rebound in the final trading session helped the benchmark KSE-100 Index recover earlier losses triggered by elevated regional geopolitical tensions.

The index closed at 185,098.83 points, posting a week-on-week increase of 689.16 points or 0.4 percent, after opening the week at 184,409.67 points. Market participants remained cautious through most of the week amid external uncertainty; however, selective buying toward the close supported index-level gains.

Meanwhile, broad-based indices also posted strong weekly performances. The BRIndex100 opened at 19,684.24 points and closed at 19,978.24 points. Total turnover on the BRIndex100 stood at 3.97 billion shares during the week. On the other hand, the BRIndex30 began the week at 62,270.21 points and eventually closed at 63,707.53 points, with cumulative turnover of 2.11 billion shares.

Overall market capitalization expanded by 1.0 percent week-on-week to Rs20,974.91 billion, equivalent to USD74.92 billion, compared to Rs20,768.09 billion or USD74.17 billion last week

Despite the improvement in index levels, market activity weakened sharply, reflecting subdued investor participation. The average daily traded volume (ADTO) on the ready board declined 24.3 percent to 981.95 million shares, while average daily traded value fell 25.9 percent to Rs58.47 billion, equivalent to USD208.83 million. In comparison, last week’s ready-market volumes stood at 1,297.54 million shares, with traded value of Rs78.85 billion (USD281.55 million)

On the macroeconomic front, encouraging signals emerged from Pakistan’s industrial sector. Large-scale manufacturing (LSM) recorded its eighth consecutive year-on-year expansion, growing 10.4 percent in November 2025. This strong monthly performance lifted five-month FY26 LSM growth to 6 percent, underscoring a gradual recovery in industrial activity

However, credit dynamics remained uneven. Private-sector credit off-take weakened sharply, with bank lending to the private sector plunging 79 percent year-on-year to Rs395 billion during 1HFY26, highlighting subdued business appetite amid high borrowing costs and lingering economic uncertainty.

In contrast, government borrowing remained elevated, as evidenced by the latest Pakistan Investment Bond (PIB) auction, which raised Rs546 billion, comfortably surpassing the target of Rs450 billion. Notably, cut-off yields declined by 59 to 70 basis points across various tenors, reflecting expectations of easing monetary conditions. Complementing this trend, the government also reduced National Savings Schemes (NSS) profit rates by 23 to 50 basis points across multiple instruments

On the external financing front, Pakistan sought further relief by requesting the United Arab Emirates to roll over USD2.5 billion in deposits for an additional two years, while simultaneously seeking a near-50 percent reduction in the financing rate on an outstanding USD450 million loan. Meanwhile, in its latest assessment, the World Bank projected Pakistan’s GDP growth at 3.0 percent for FY26, reflecting a cautiously optimistic macroeconomic outlook

In the automobile sector, sales momentum remained strong. Four-wheeler volumes increased 31 percent year-on-year in December 2025, taking 1HFY26 cumulative growth to 45 percent, supported by improving consumer demand and easing supply constraints

On the foreign exchange reserves front, the State Bank of Pakistan’s holdings edged up marginally by USD16 million week-on-week to USD16.1 billion, providing limited near-term comfort on the external account

Sector-wise performance during the week remained mixed. Exploration and Production (E&Ps) stocks outperformed with a 7.1 percent gain, followed by Autos (+2.5 percent), Power (+1.5 percent), Technology & Communication (+1.1 percent), Oil & Gas Marketing Companies (+1.0 percent) and Banks (+0.4 percent). On the downside, Pharmaceuticals (-2.8 percent) led declines, followed by Food (-1.3 percent), Refinery (-0.9 percent), Cement (-0.8 percent), Fertilizer (-0.2 percent) and Chemicals (-0.1 percent)

In terms of trading volumes by sector, Technology & Communication stocks accounted for 16 percent of total market turnover, followed by Power (11 percent), Banks (10 percent), Food (8 percent) and Investment Banks (7 percent), while all other sectors collectively contributed 49 percent.

Among KSE-100 index constituents, ATLH emerged as the top gainer, surging 22.3 percent, followed by AKBL (+12.8 percent), LOTCHEM (+12.4 percent), OGDC (+12.2 percent), JVDC (+10.7 percent), PPL (+10.2 percent) and PTC (+9.5 percent). Conversely, IBFL led the decliners with a 13.8 percent fall, while SAZEW and AICL both declined 10.3 percent, followed by PABC (-6.5 percent), YOUW (-6.4 percent), PSEL (-5.1 percent) and HUMNL (-5.1 percent).

Going forward, analysts expect market sentiment to remain sensitive to developments on the geopolitical front, progress on external financing arrangements, monetary policy direction, and sustainability of the ongoing recovery in manufacturing output and consumer demand, particularly in the auto sector.