KARACHI: Renewed tensions in the Middle East rattled investors and dragged the Pakistan Stock Exchange (PSX) lower during the outgoing week, as fears of higher oil prices and broader economic uncertainty sparked widespread selling despite intermittent recoveries.
The benchmark KSE-100 index closed at 182,242 points, down 3,130 points, or 1.7 per cent week-on-week, after geopolitical developments overshadowed encouraging domestic macroeconomic indicators.
According to Topline Securities, the market came under pressure following renewed hostilities involving the US and Iran, which pushed up international crude oil prices and weakened investor confidence.
The week began on a positive note, with the KSE-100 gaining more than 2,000 points on Monday and extending the previous week’s rally. However, sentiment reversed sharply as tensions escalated, triggering heavy selling that erased early gains. Although the market staged a partial recovery towards the end of the week, it was insufficient to offset overall losses.
Record $41.6bn remittances and SBP reserves fail to lift mood
AKD Securities said the market remained highly volatile as uncertainty surrounding the US-Iran conflict dominated trading. Oil prices briefly climbed to around $80 per barrel before retreating, while reports of attacks on vessels in the Strait of Hormuz heightened investor anxiety. A sharp decline of 4,626 points in Wednesday’s session was followed by a partial rebound after US President Donald Trump indicated at the Nato summit that the conflict was unlikely to escalate further.
Despite weak price performance, trading activity remained robust. Average daily traded volume stood at 1.07 billion shares, up nearly 24pc from the previous week, while average daily traded value amounted to Rs47.6bn.
Among key macroeconomic developments, according to Arif Habib Ltd (AHL), the government raised Rs2.07 trillion through the first treasury bill auction of FY27 against a target of Rs2.4tr. Cut-off yields declined by 31 to 40 basis points across all maturities, reflecting easing expectations on interest rates.
Pakistan also received workers’ remittances of $3.5bn in June, up 2pc year-on-year but down 18pc from May. Total remittances reached a record $41.6bn in FY26, marking a 9pc annual increase.
The State Bank’s foreign exchange reserves rose by $1.94bn to $18.5bn during the week, lifting total liquid reserves to $24bn and providing an import cover of around 2.9 months. Meanwhile, the rupee remained broadly stable, appreciating marginally by 0.02pc to close at Rs278.05 against the dollar.
The cement sector reported an 18pc year-on-year increase in despatches during June to 4.33 million tonnes, largely due to a low base effect. Total dispatches for FY26 climbed 8pc to 50.58m tonnes, the highest level in four years.
Oil and gas production also improved during the week, with gas output rising 4.2pc to 3,097 million cubic feet per day and oil production increasing 6pc to 70,157 barrels per day.
The central government debt reached Rs82tr in May, up 7.8pc from a year earlier. Net metering installations continued to rise, while overall power generation declined 0.9pc in May despite expectations of modest demand growth during 2026.
On the flow side, insurance companies and mutual funds remained the largest net sellers, offloading equities worth $19.6 million and $10.2m, respectively. Individuals and banks emerged as the principal buyers, purchasing shares valued at $13.5m and $9.5m.
The exploration and production sector exerted the biggest drag on the benchmark index, shaving off 648 points, followed by fertiliser, cement, investment banks and commercial banks. Refineries, synthetic and rayon, sugar and tobacco sectors posted modest gains.
Analysts said the market’s near-term direction would largely depend on geopolitical developments and international oil prices. They added that progress in US-Iran negotiations, coupled with June corporate earnings, could improve investor sentiment.
Published in Dawn, July 12th, 2026