PSX benchmark index closes almost flat despite volatility

Pakistan Stock Exchange (PSX) experienced volatility throughout the week amid border tensions with Afghanistan, declining initially before rebounding sharply by 4,900 points in the final session following positive news of a potential ceasefire. It ultimately closed at 161,632 points, down 1% during the week.

Average daily traded volumes contracted by 14.7%WoW to 1,564 million shares despite roll over week as investors remained cautious.

The key highlight was the decision by State Bank of Pakistan (SBP) to maintain the policy rate at 11%, broadly in line with expectations.

Pakistan-Afghanistan negotiations in Istanbul concluded with a truce under certain conditions, easing geopolitical tensions.

Meanwhile, authorities assured the IMF of additional PKR200 billion in revenue measures if 1HFY26 tax targets fall short.

In the T-Bill auction, the SBP raised PPR1.0 trillion, with yields falling 11bps on 1-month paper but rising 10bps on 12-month tenor.

Foreign exchange reserves held by SBP declined by US$16 million to US$14.5 billion as of October 24, 2025.

AKD Securities foresees the momentum in the benchmark index to continue given successful staff-level agreement of the IMF’s second review, minimal flood impact and improved credit ratings by global agencies amid falling fixed income yields.

Investors’ sentiments are expected to further improve on the likelihood of foreign portfolio and direct investment flows, driven by improved relations with the United States and Saudi Arabia.

This outlook is supported by the lack of alternative investment avenues and the attractive valuation of local equities.

Top picks of AKD Securities include MEBL, MCB, HBL, OGDC, PPL, PSO, FFC, ENGROH, LUCK, DGKC, FCCL, SYS and INDU.