KARACHI: The Pakistan Stock Exchange (PSX) ended a volatile three-session trading week on a positive note, with a strong recovery in the final session helping the benchmark KSE-100 index post modest gains ahead of the extended Ashura holidays.

According to Arif Habib Ltd, the KSE-100 index settled at 179,571 points, up 649 points, or 0.36 per cent week-on-week. The gain was largely attributed to easing geopolitical tensions following the signing of a peace memorandum of understanding and improved investor sentiment despite the rollover week.

Market activity remained uneven during the shortened week, with the index declining over the first two sessions before rebounding on Wednesday. Analysts said the recent de-escalation in tensions involving the US and Iran supported sentiment and raised hopes of greater market stability in the coming week.

Among key economic developments, petrol and high-speed diesel prices were reduced by Rs74.28 and Rs67.31 per litre to Rs299.50 and Rs311.47, respectively, reflecting lower ex-refinery prices and a cut in the petroleum levy.

KSE index closes at 179,571 as OGDC, cement lead recovery after two-session drop

The government raised Rs1.24 trillion through a treasury bill auction against a target of Rs1.2tr, with cut-off yields declining across all maturities by 39 to 115 basis points. The 12-month paper attracted the largest share of investment.

The approved Finance Bill 2026 abolished super tax for companies deriving more than 80pc of their turnover from exports, a move welcomed by the corporate sector.

In the energy sector, Oil and Gas Development Company Ltd (OGDC) commenced gas production from the Sahito-1 discovery well in the Khewari Exploration Licence, while Mari Energies started production from the Shams-1 well, boosting domestic gas supplies.

The rupee also posted a marginal gain, appreciating 0.02pc against the dollar to close the week at Rs278.20.

Exploration and production companies made the largest positive contribution to the index, adding 365 points, followed by cement (352 points), leather and tanneries (126 points), textile composites (71 points) and power generation (64 points). Banking stocks weighed on the market, shaving off 226 points, while technology, investment banks, fertilisers and refineries also posted negative contributions.

Among individual stocks, OGDC contributed 196 points to the index gain, followed by United Bank Ltd, Pakistan Petroleum Ltd, Service Industries and Maple Leaf Cement. On the downside, Bank Al-Habib, Bank Alfalah, Habib Bank, Fauji Fertiliser Company and Pakistan State Oil exerted the greatest pressure.

Average daily trading volume stood at 808 million shares, down 30pc from the previous week, while average traded value declined 41pc to $134 million.

AKD Securities noted that the National Assembly’s approval of the Rs18.8tr FY27 budget supported sentiment, particularly for cement, steel, refinery, textile, pharmaceutical and technology sectors. The brokerage also highlighted lower fuel prices and a sharp decline in treasury bill yields as positive developments for the market.

Other notable developments included expectations of $3.24bn in savings from the conversion of the Jamshoro Power Plant, agreement between the government and oil industry on a petroleum pricing mechanism, and progress towards handing over the control of the Pakistan International Airlines to the new owners.

Sector-wise, leather and tanneries, sugar and allied industries, and textile composites emerged as the top performers, while vanaspati and allied industries, synthetic and rayon, and refineries lagged behind.

Flow data showed companies were the largest net buyers during the week, while foreign investors remained net sellers.

Looking ahead, analysts expect the market to retain its positive momentum, supported by easing inflationary pressures, lower oil prices and expectations of favourable corporate earnings. Progress in US-Iran negotiations and movements in international crude prices are likely to remain key drivers of investor sentiment.

The market continues to trade at attractive valuations, with the KSE-100 index priced at 8.3 times earnings and offering a dividend yield of 6.1pc, while AKD Securities estimates a forward price-to-earnings ratio of 7.1 times.

Published in Dawn, June 26, 2026