KARACHI: The Pakistan Stock Exchange (PSX) remained subdued during the outgoing week as renewed tensions between the US and Iran, coupled with rising oil prices, heightened uncertainty over the economic outlook.
According to Arif Habib Ltd (AHL), the benchmark KSE-100 index fell 2,368 points, or 1.3 per cent week-on-week, to close at 175,329 points.
Investor sentiment was partly supported by corporate earnings and Pakistan’s record $3 billion Eurobond issuance. The government raised the amount through five-year and 10-year bonds at yields of 7.5pc and 7.9pc respectively. The transaction was the country’s largest-ever international capital market deal and achieved the lowest spreads over US Treasuries in two decades, according to Topline Securities Ltd.
AKD Securities Ltd also attributed the decline to escalating Middle East conflict, now in its seventh month, being the primary headwind, following US strikes on Iran and subsequent Iranian retaliatory strikes on US air bases in the region. Brent crude hit a six-week high of $97.6 per barrel during the week.
Record $3bn Eurobond partly lifts investor sentiment
On the macroeconomic front, consumer price inflation accelerated to 11.1pc in August from 9.2pc in July, mainly due to higher transport and food prices. Pakistan’s trade deficit widened 10pc year-on-year to $3.2bn, as exports increased 3.8pc to $2.5bn while imports rose 7.4pc to $5.7bn. However, the deficit narrowed 20pc month-on-month.
The Federal Board of Revenue collected Rs902bn in August, 2pc higher than a year earlier but Rs28bn below its Rs930bn target. During the first two months of FY27, tax collection reached Rs1.722 trillion, exceeding the target by Rs12bn.
The government also raised Rs680.1bn through treasury bill auctions against a Rs800bn target, with most of the amount raised through three-month bills. Yields declined across most tenors, ranging between 11.39pc and 11.99pc.
Pakistan’s foreign exchange reserves held by the State Bank of Pakistan rose modestly by $19 million week-on-week to $17.1bn as of Aug 28.
Sector-wise, investment banks contributed 151 points to the index, followed by fertiliser companies with 82 points, auto parts with 31, transport with 10 and textile composite companies with three points.
Banks were the biggest drag, taking 1,318 points off the index, followed by cement with 334 points, exploration and production companies with 194, technology with 185 and power with 126 points.
Among individual stocks, Engro Fertilisers added 177 points, Engro Holdings 159, Oil and Gas Development Company 82, Thal 31 and Interloop 26. United Bank Ltd led the declines, reducing the index by 555 points, followed by Habib Bank Ltd with 252, Pakistan Petroleum Ltd with 232, Meezan Bank Ltd with 142 and Lucky Cement Ltd with 139 points.
Average daily traded volume and value during the week stood at 767m shares and Rs33bn, respectively.
Other notable developments included an eight-times oversubscription for Naya Nazimabad Apartments REIT, which reached the Rs23 upper price ceiling and raised Rs1bn. Refinery uplift rose 32.2pc year-on-year to 964,000 tonnes in August, while petroleum product sales fell 3pc to 1.26m tonnes, noted AHL.
Urea offtake declined 14pc to 701,000 tonnes, although Engro Fertilisers recorded 18pc growth. Cement dispatches slipped about 1pc in August to 4.04m tonnes, though two-month FY27 dispatches remained 3pc higher year-on-year.
Analysts expect the market to remain sensitive to geopolitical developments. AHL said the ongoing earnings season and the upcoming IMF review could provide support, with the KSE-100 trading at a price-to-earnings ratio of 7.8 times and offering a 6.3pc dividend yield.
AKD expects strengthening economic indicators and a firmer fiscal position to improve sentiment. Moderating inflation could also increase the likelihood that interest rates will return to single digits by year-end.
Published in Dawn, September 6th, 2026
