Stock market soars 3.6% in historic rally
Listen to article
Pakistan's stock market staged a strong recovery in the outgoing week, where the benchmark KSE-100 index surged 4,356 points, or 3.6% week-on-week (WoW), to close at 124,379.06. The rally came after investor sentiment improved sharply following a ceasefire announcement in the Middle East, easing geopolitical concerns and stabilising oil prices.
Despite a cautious start, the index recorded its second-largest single-day gain on Tuesday, surging 6,079 points (+5.23%). Meanwhile, economic developments, including the passage of Finance Bill 2025, a $4.5 billion commercial loan to address power sector debt and a sharp fall in State Bank of Pakistan's (SBP) reserves, remained in focus.
On a day-on-day basis, the PSX faced a sharp sell-off on Monday as escalating geopolitical tensions rattled investor confidence and triggered panic selling. The KSE-100 index recorded a plunge of 3,856 points, or 3.21%, and settled at 116,167.
On Tuesday, peace in the Middle East ignited a rally and the local bourse rebounded on ceasefire optimism, posting a historic second-highest gain of over 6,000 points by ending the day's affairs at 122,247 (+5.23%) and reconquering the 120k psychological level.
However, the market had a range-bound day on Wednesday. The index mostly remained positive, during which it touched intra-day high of 123,257 (+0.83%) and low of 122,169 (-0.06%). It ended the day at 122,762, up 515 points, or 0.42%.
After a surge of almost 6,600 points (+5.7%) in two sessions post Iran-Israel ceasefire, the PSX had a profit-taking day on Thursday. Resultantly, the index wrapped up the session at 122,047 by shedding 715 points, or 0.58%.
Nonetheless, the market resumed its bullish momentum on last trading day of the week and the KSE-100 ended at 124,379 with impressive gains of 2,333 points, or 1.91%. Robust buying by institutional investors provided boost, driven by expectations of FY26 equity reallocations and budget approval by the National Assembly.
Arif Habib Limited (AHL), in its weekly report, said the market opened under pressure in the outgoing week as investor sentiment turned cautious amid escalating geopolitical tensions in the Middle East, driving uncertainty across global markets and weighing on the KSE-100 index. However, following news of a ceasefire on Tuesday, the market staged a strong rebound, recording its second-largest single-day gain of 6,079 points (+5.23%).
On the economic front, it mentioned, the SBP raised Rs345 billion in T-bill auction against the target of Rs650 billion, where yields dropped 3-9 basis points across all tenors. Additionally, Rs251.5 billion was raised through the government of Pakistan Ijara Sukuk, which exceeded the target of Rs175 billion.
Power generation in May 2025 rose 1% year-on-year (YoY) to 12,755 gigawatt hours (GWh), while cumulative Roshan Digital Account (RDA) gross inflows reached $10.4 billion as of May. Meanwhile, SBP's foreign exchange reserves declined by $2.66 billion to $9.06 billion, primarily due to external debt repayments, including commercial borrowings. Pakistani rupee depreciated by 2 paisa WoW to close at 283.72 against the US dollar, AHL said.
Sectors that contributed positively to the stock market were commercial banks (1,120 points), cement (691 points), fertiliser (629 points), exploration & production (577 points) and glass and ceramics (146 points). Meanwhile, sector-wise, negative contribution mainly came from miscellaneous (84 points).
Among individual stocks, positive contribution came from Lucky Cement (382 points), Fauji Fertiliser Company (357 points), UBL (319 points), Meezan Bank (316 points) and OGDC (192 points). Scrip-wise, negative contributors were Pakistan Services (133 points), Pakgen Power (96 points), International Steels (7 points), Colgate-Palmolive (6 points) and SNGPL (5 points). Foreign selling was witnessed during the week under review, which came in at $11.78 million compared with net buying of $0.46 million last week.
Wadee Zaman of JS Global noted that the KSE-100 index gained 3.6% WoW, driven by easing tensions in the Middle East amid a ceasefire announcement by the US president, which also helped cool off oil prices after recent spikes. Average daily turnover fell 10% WoW.
On the economic front, he said, the National Assembly passed the Finance Bill 2025 with a total outlay of Rs17.6 trillion. Separately, the government secured a $4.5 billion loan from commercial banks to address power-sector circular debt at Karachi Inter-bank Offered Rate (Kibor) minus 0.9%, in line with IMF conditions.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
an hour ago
- Business Recorder
Gold rebounds from over one-month low on weaker dollar
Gold reversed course and edged higher on Monday, supported by a weaker dollar, after hitting a more than one-month low earlier as easing U.S.-China trade tensions dampened safe-haven demand and bolstered risk appetite. Spot gold rose 0.3% to $3,281.65 per ounce, as of 0216 GMT, after hitting its lowest since May 29 earlier in the session. U.S. gold futures were up 0.2% at $3,293.30. 'There is less of a 'doom and gloom' outlook surrounding both tariff talks and events in the Middle East, which is relegating gold to play second fiddle to risk assets,' KCM Trade Chief Market Analyst Tim Waterer said. Asian shares firmed, with Wall Street futures advancing, while U.S. dollar index fell 0.2%. A lower dollar makes greenback-priced bullion less expensive. The U.S. and China have resolved issues surrounding shipments of rare earth minerals and magnets to the U.S., Treasury Secretary Scott Bessent said on Friday, adding, the Trump administration's various trade deals with other countries could be done by the September 1 Labor Day holiday. Meanwhile, U.S. President Donald Trump abruptly cut off trade talks with Canada on Friday over its tax targeting U.S. technology firms, saying that it was a 'blatant attack' and he would set a new tariff rate on Canadian goods within a week. The Iran-Israel ceasefire after a 12-day conflict also appeared to be holding, further reducing safe-haven demand. 'The dollar remains pressured which is limiting the extent of the slide for gold. However, the $3,250 level shapes as a key support level for gold. Any breach of this level could see losses accelerate towards the $3,200 level,' Waterer said. Stable geopolitical and economic conditions often reduce demand for gold as a safe-haven asset, while non-yielding bullion's appeal further wanes in a high-interest-rate environment. Spot silver was down 0.1% at $36.02 per ounce, platinum firmed 1% to $1,353.13, while palladium was up 0.2% at $1,135.48.
Business Recorder
an hour ago
- Business Recorder
Oil falls on prospect of more OPEC+ supply, easing risks in Mideast
SINGAPORE: Oil prices fell 1% on Monday as an easing of geopolitical risks in the Middle East and the prospect of another OPEC+ output hike in August boosted the supply outlook. Brent crude futures fell 66 cents, or 0.97%, to $67.11 a barrel by 0031 GMT, ahead of the August contract's expiry later on Monday. The more active September contract was at $65.97, down 83 cents. U.S. West Texas Intermediate crude dropped 94 cents, or 1.43%, to $64.58 a barrel. Last week, both benchmarks posted their biggest weekly decline since March 2023, but they are set to finish higher in June with a second consecutive monthly gain of more than 5%. A 12-day war that started with Israel targeting Iran's nuclear facilities on June 13 caused Brent prices to surge above $80 a barrel after the U.S. bombed Iran's nuclear facilities and then slump to $67 after President Donald Trump announced an Iran-Israel ceasefire. The market has stripped out most of the geopolitical risk premium built into the price following the Iran-Israel ceasefire, IG markets analyst Tony Sycamore said in a note. Oil steadies after report of planned OPEC+ Aug output hike Further weighing on the market, four delegates from OPEC+, which includes allies of the Organization of the Petroleum Exporting Countries, said the group was set to boost production by 411,000 barrels per day in August, following similar-size output increases for May, June and July. OPEC+ is set to meet on July 6 and this would be the fifth monthly increase since the group started unwinding production cuts in April. In the U.S., the number of operating oil rigs, an indicator of future output, fell by six to 432 last week, the lowest level since October 2021, Baker Hughes said.
Business Recorder
2 hours ago
- Business Recorder
Will low reserves be the new normal?
EDITORIAL: That the economy is stuck in a low-growth trap is a fact. Imports are already inching up without being accompanied by a robust growth momentum. Traditionally, import pressure has been felt when growth reached over four percent; however, now after two years of stabilisation at 2-3 percent growth, a stress is already visible in the interbank market. The issue is that the economy's size is growing, as nominal GDP has increased from US$ 311 billion in FY16 to US$ 410 billion in FY25. However, SBP forex reserves today stand at US$10-12 billion compared to US$18 billion in FY16. Commodity prices, even after declining from their super cycle peak, remain higher than their FY16-18 levels. Low reserves combined with relatively higher commodity prices have created a new normal that coupled with a rising consumption demand from a young and growing population traps the economy in a cycle of low growth. The key question is why reserves are not increasing and why external funding has dried up, despite the country continuously being in IMF programmes and receiving praise from the Fund for its progress and reform commitments. Moreover, why are bilateral and market-based inflows scarce, even though international rating agencies have upgraded the country's ratings? Why is the country stuck in repeated rollovers? Recently, China approved only half of its committed funding. Other bilateral partners are merely rolling over existing loans. Commercial loans remain expensive, despite improved ratings. The finance minister has yet to start attracting capital from Chinese markets via panda bonds, and there are no discussions about issuing new Eurobonds or sukuk. No fresh loans appear imminent. Currently, the government has only empty promises for investment. At best, it can secure sovereign loans by improving perceived sovereignty internationally. Investment should ideally come from the private sector, but when local investors themselves are looking to take capital out of the country, it is unrealistic to expect foreign investors to show interest. The drain on the financial account continues, and some loans might not roll over, while capital account inflows (FDI) remain insufficient to bridge the gap. Consequently, the current account must remain balanced — if not in surplus — during FY26. Remittances cannot grow significantly, given their large existing base, and exports have limited upside potential. Conversely, import pressure is building. At current growth levels of 2-3 percent, imports are already difficult to manage. With the national tariff rationalisation policy in action, reductions in import duties are likely to drive even higher imports, thus making demand management critical. The currency is the first line of defence. The SBP has accelerated currency depreciation from five paisas a day to 15 paisas a day, with PKR/USD currently hovering around 284. The currency needs to adjust further until imports are brought under control, which implies little room remains for additional interest rate cuts. Another concern is that currency depreciation will reignite inflation expectations because fuel and energy costs are pegged to the US dollar and the interest payments on government's external debt would increase. Any corresponding increase in exports as a result of currency depreciation would at best be marginal to begin with. Thus the fragile macroeconomic recovery faces premature challenges as these trends likely to persist in FY26 as well. Copyright Business Recorder, 2025
