Key Points
- KSE-100 index posts modest weekly rise, extending strong annual gains
- Benchmark index up about 70 per cent compared tothe same period last year
- Volatility persists amid geopolitical risks and policy outlook
- Institutional buying supports the market despite profit-taking
ISLAMABAD: Pakistan’s stock market closed the week on a positive note, extending its strong performance over the past year, with the benchmark KSE-100 index up about 70 per cent compared to the same period last year, according to Pakistan Stock Exchange (PSX) data.
The weekly close reinforced the market’s position among the better-performing equity markets in emerging economies. Improved volumes of trade indicated bullish sentiment overall and renewed interest on the part of both the local and foreign investors.
Weekly Performance Snapshot
The KSE-100 index ended the week at around 185,099 points, gaining nearly 700 points from the previous week’s close of about 184,409 points, as per official PSX figures. The net weekly increase was modest, but it followed sharp fluctuations that tested investor confidence.
During the week, market activity was highly volatile, and the benchmark index touched an intra-week high of roughly 185,209 points. On the downside, it also slipped to a low of almost 180,783 points. These wide swings highlighted the cautious mood prevailing in the market before buyers returned in the final sessions.
Strong finish lifts sentiment
Market sentiment improved notably toward the end of the week. In one of the final sessions, the KSE-100 index surged by about 3,643 points, or roughly 2 per cent, helping the market recover losses accumulated earlier in the week.
Analysts attributed the rebound to renewed buying by local institutional investors and selective participation from high-net-worth individuals. Expectations of potential easing in monetary policy later in the year also played a role, traders told Reuters, adding that lower interest rates could improve equity valuations.
Profit-taking and caution early in the week
Earlier in the week, trading was dominated by profit-taking. Investors chose to lock in gains after the index hovered near record highs in recent weeks. Regional geopolitical tensions and uncertainty over the pace of domestic economic reforms reinforced this cautious approach.
Despite selling pressure, the broader market avoided a sharp correction. Strong liquidity conditions and steady demand for fundamentally sound stocks helped limit downside risks, keeping the index within a relatively stable range.
Trading activity and market breadth
In value terms, trading activity remained healthy. The daily traded value ran into several tens of billions of rupees, indicating sustained interest from both institutional and retail investors. Market participants said liquidity remained ample despite intermittent risk-off sentiment.
Banking, energy and select industrial stocks accounted for a large share of traded volumes. These sectors continue to attract investor interest due to their weight in the benchmark index and their perceived resilience amid economic uncertainty.
Year-on-Year rally in focus
On a year-on-year basis, the PSX has delivered one of its strongest performances in recent history. The KSE-100 index is up by roughly 70 per cent compared to levels seen in January last year, according to exchange data.
Analysts link the sharp annual rise to several factors. These include macroeconomic stabilisation, improved foreign exchange conditions, and expectations that the interest rate cycle may gradually turn more supportive for growth. Improved earnings visibility in key sectors has also supported the rally.
Risks and volatility ahead
Despite the strong annual gains, market participants cautioned that volatility is likely to persist in the near term. Global risk sentiment remains fragile, influenced by geopolitical developments and shifts in international monetary policy.
Domestically, investors are closely watching signals related to fiscal measures, reform implementation and engagement with multilateral lenders. Any adverse external shock or delay in reforms could trigger short-term corrections, analysts warned.
Outlook for the Coming Weeks
Looking ahead, analysts expect the PSX to remain sensitive to data on inflation, interest rates and currency stability. Corporate earnings announcements and policy signals from economic managers are also likely to shape market direction.
While short-term oscillations may continue, market participants believe that sustained institutional participation and improving macroeconomic indicators could help support equities over the medium term, provided economic reforms remain on track.
