KARACHI: The Pakistan Stock Exchange (PSX) remained under pressure during the outgoing week as the benchmark KSE-100 index lost 2.7 per cent amid escalating geopolitical tensions in the Middle East, rising international oil prices and cautious investor sentiment.
The KSE-100 index shed 4,782 points to close at 171,021.20, extending the previous week’s losses as concerns over the widening US-Iran conflict overshadowed positive domestic developments, including an upgrade in Pakistan’s sovereign credit rating.
According to Topline Securities, the escalation in tensions between Washington and Tehran pushed crude oil prices higher, dampening investor confidence.
Average daily traded volume stood at 696 million shares, while average daily traded value amounted to Rs28 billion during the week.
KSE-100 loses 4,782 points to 171,021 in outgoing week on oil surge
The government’s treasury bill auction also drew attention as it raised Rs729bn, with yields rising by 12 to 51 basis points across various maturities, reflecting tighter money market conditions.
Market activity showed mixed investor participation. Foreign corporates and individual investors remained net buyers, purchasing equities worth $30 million and $11m, respectively.
In contrast, mutual funds emerged as the largest sellers, offloading shares worth $28m, while banks recorded net sales of $10m.
Arif Habib Ltd (AHL) said the market remained under pressure throughout the week because of persistent geopolitical uncertainty.
Among key economic developments, S&P Global Ratings upgraded Pakistan’s long-term sovereign credit rating to ‘B’ from ‘B-’ with a stable outlook, citing progress under the IMF-supported reform programme, improved fiscal performance, stronger institutions and higher foreign exchange reserves.
The banking sector continued to post steady growth. Deposits increased 15.2pc year-on-year to Rs40.9 trillion in June, while advances rose 13pc to Rs15.3tr and investments climbed 16.4pc to Rs42.6tr. The advances-to-deposits ratio stood at 37.4pc, while the investments-to-deposits ratio was 104.2pc.
In the energy sector, gas production declined 1.7pc week-on-week to 3,005 million cubic feet per day during the second week of July, mainly because of lower output from the Uch, Kandhkot and Shewa fields. Shewa’s production dropped sharply following disruptions linked to the SNGPL pipeline rupture. Oil production also slipped 0.3pc to 71,344 barrels per day.
Meanwhile, petroleum prices were increased under the new daily pricing mechanism. Petrol prices rose by Rs15.37 per litre to Rs331.52, while high-speed diesel became dearer by Rs24.31 per litre to Rs378.66, reflecting the seven-day average of Platts prices.
The rupee remained largely stable against the US dollar, appreciating marginally by 0.03pc during the week to close at Rs277.87.
Sector-wise, banks contributed the most to the benchmark index’s decline, followed by fertiliser, exploration and production, cement and investment banks. Refinery, insurance, real estate, textile weaving and paper and board sectors provided limited support.
Among individual stocks, United Bank Ltd, Fauji Fertilizer Company, Habib Bank Ltd, Engro Holdings and Pakistan Petroleum Ltd weighed most heavily on the index. On the positive side, Attock Refinery, Cnergyico, Nestle Pakistan, Ghani Glass and Adamjee Insurance posted gains.
AHL noted that average trading volume declined 6pc to 696 million shares, while average daily traded value fell 19pc to $99.8m.
The brokerage said investors would continue to monitor geopolitical developments, corporate earnings and the State Bank’s upcoming monetary policy decision. They expect the central bank to keep the policy rate unchanged at 11.5pc while assessing external risks and inflationary pressures. The market is currently trading at a price-to-earnings ratio of 7.9 times, offering a dividend yield of 6.4pc.
AKD Securities said the market remained under pressure as the US-Iran conflict widened, raising fears over disruptions to key global energy supply routes. Brent crude briefly climbed above $101 per barrel before easing to around $96, intensifying concerns over Pakistan’s import bill and inflation outlook.
The brokerage noted that the sovereign rating upgrade by S&P Global provided some support to sentiment despite persistent external risks.
Other major developments during the week included Pakistan seeking a $10bn bilateral exchange stabilisation facility from the US, proposed amendments to the Brownfield Refining Policy 2023, the purchase of a spot LNG cargo at $21.88 per million British thermal units, new US tariffs on trading partners, and the introduction of daily petroleum pricing by the Oil and Gas Regulatory Authority.
Analysts said the trajectory of the US-Iran conflict, international oil prices, the monetary policy announcement and corporate results for June would remain the key drivers of market performance in the coming weeks.
Despite the recent downturn, the PSX continues to trade at attractive valuations, with the index currently valued at a price-to-earnings ratio of about 7.8 times.
Published in Dawn, July 26th, 2026
