RECORDER REVIEW

KARACHI: The Pakistan Stock Exchange (PSX) witnessed a strong bull run during the outgoing week as easing geopolitical tensions in the Middle East, coupled with investor-friendly fiscal measures announced in the FY27 budget, significantly boosted sentiment and triggered aggressive buying across major sectors.

The benchmark KSE-100 Index surged by 6,522.84 points, or 3.8 percent, on a week-on-week basis to close at 178,922.75 points, compared with 172,399.91 points a week earlier.

The BRIndex100 advanced from 19,067.69 points to 19,844.46 points, registering a gain of 776.77 points during the week. Total turnover in the index stood at 4.32 billion shares, translating into an average daily turnover of approximately 864.81 million shares.

Similarly, the BRIndex30 rose from 69,412.84 points at the beginning of the week to 72,590.00 points at the close, posting a substantial gain of 3,177.16 points. Weekly turnover in the index reached 2.60 billion shares, averaging around 519.48 million shares per trading day, indicating strong participation in blue-chip stocks.

Investors welcomed the landmark Islamabad Memorandum of Understanding (MoU) signed between the United States and Iran, which substantially reduced regional uncertainty and eased concerns over global energy supplies.

The reopening of the Strait of Hormuz and the subsequent decline in international oil prices further supported market sentiment, with Brent crude falling to around $80 per barrel, encouraging investors to rebuild positions in Pakistani equities.

Domestic policy developments also emerged as a key catalyst for the rally. The government unveiled the FY27 Finance Bill, introducing several measures aimed at improving corporate profitability and stimulating economic activity. Among the major announcements was the complete abolition of the Super Tax for companies with annual earnings of up to Rs500 million, alongside a 2 percent reduction in corporate tax rates for higher-income firms, significantly improving earnings prospects for listed companies.

Investor confidence was further reinforced after the State Bank of Pakistan (SBP) kept the benchmark policy rate unchanged at 11.5 percent during its June Monetary Policy Committee meeting. The central bank maintained that recent inflationary pressures were largely driven by external factors, particularly elevated oil prices stemming from earlier geopolitical tensions in the Middle East, rather than excessive domestic demand.

Pakistan’s external sector also continued to improve. The country recorded a current account surplus of USD459 million in May 2026, driven primarily by robust workers’ remittances, taking the cumulative current account surplus during 11MFY26 to USD255 million.

Industrial activity also showed signs of strengthening. Large-Scale Manufacturing (LSM) expanded by 6.1 percent year-on-year in April 2026, while cumulative growth during 10MFY26 reached 6.44 percent, indicating sustained recovery in industrial output.

Meanwhile, the government’s latest Pakistan Investment Bond (PIB) auction attracted strong investor participation, with authorities raising Rs649 billion.

Yields across various tenors declined by 34 to 116 basis points, reflecting improving confidence in the country’s inflation and interest rate outlook.

The robust market rally significantly boosted investor wealth. Total market capitalization increased by 4.6 percent, rising to Rs19.99 trillion from Rs19.12 trillion a week earlier, representing an increase of approximately Rs874.40 billion. In dollar terms, market capitalization climbed to USD71.86 billion from USD68.70 billion.

Trading activity also strengthened considerably during the week, reflecting renewed investor confidence and aggressive accumulation across the broader market. Average daily traded volume (ADTO) in the ready market surged 47.8 percent to 1.15 billion shares, compared with 775.96 million shares a week earlier.

In value terms, average daily traded value more than doubled, rising 118.4 percent to Rs63.01 billion from Rs28.86 billion recorded in the previous week. In dollar terms, average daily turnover similarly jumped 118.4 percent to USD226.44 million, compared with $103.67 million a week earlier, underscoring a sharp improvement in market liquidity and institutional participation.

Market participants said the combination of geopolitical de-escalation, a stable monetary policy stance, improving external account indicators and growth-oriented tax measures provided a strong foundation for the market’s upward trajectory.

Going forward, analysts expect investor focus to remain on the implementation of budgetary measures, progress on structural reforms and developments on the international geopolitical front. Sustained stability in global oil prices and continued improvement in macroeconomic indicators are likely to remain key drivers of market sentiment in the coming weeks.