KARACHI: A sharp decline in oil prices, driven by easing geopolitical tensions in the Middle East and an anticipated status quo in the State Bank of Pakistan’s policy rate, attracted aggressive value hunting, propelling the benchmark KSE 100 index above 178,000 points on Monday.
Equity investors saw a remarkable increase of Rs742.7 billion in market capitalisation in just one session, driven by rising optimism about the economic outlook.
Topline Securities Ltd said the PSX witnessed a robust recovery on Monday, with the index rebounding sharply after last week’s weakness. The index settled at 178,262.33 points, registering a gain of 7,241.13 points or 4.23 per cent, as broad-based buying and improved investor sentiment fuelled a strong market-wide rally.
The recovery followed a challenging week in which the index declined by approximately 2.7pc, primarily due to heightened geopolitical tensions in the Middle East, volatility in international oil prices, and investor caution ahead of Pakistan’s monetary policy announcement.
With these concerns partially easing, investors took advantage of attractive valuations, leading to renewed buying interest across key sectors and a broad-based market rebound.
United Bank, Fauji Fertiliser, Engro Holdings, Meezan Bank, and Lucky Cement emerged as the leading performers, collectively contributing approximately 2,546 points to the benchmark. Their strong performance underscored the leadership of heavyweight stocks in driving the market’s upward momentum.
Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said PSX witnessed a strong rally as investor sentiment improved following the suspension of military strikes between the US and Iran, raising hopes for a diplomatic resolution to the Middle East conflict and the resumption of shipping through the Strait of Hormuz. The easing of geopolitical tensions significantly boosted risk appetite across the market.
On the macro front, the State Bank of Pakistan (SBP) maintained the policy rate at 11.5pc, balancing inflationary risks stemming from geopolitical developments against improving macroeconomic conditions and the recent rating upgrade.
Market activity remained robust, with traded volume surging 77.98pc to 1.03 billion shares and total turnover rising 71.65pc to Rs41.01 billion. WorldCall Telecom topped the volume chart with 135.8 million shares traded.
Analysts believe that ongoing geopolitical calm, improving macroeconomic fundamentals, and strong corporate earnings could sustain the market’s recovery. However, developments in the Middle East and changes in global oil prices will remain key short-term drivers.
Published in Dawn, July 28th, 2026
