PSX benchmark index closes week slightly above 150,000 mark

Pakistan Stock Exchange (PSX) remained volatile throughout the week, primarily driven by evolving geopolitical tensions in the Middle East and sharp movements in international oil prices. The benchmark index declined by 1,309 points during the week to close at 150,399 points, leading to subdued market participation, with average daily traded volumes declining by 31%WoW to 604 million shares.

Positive sentiments in the first half of the week were supported by: 1) Pakistan-led diplomatic efforts fueling optimism for a possible de-escalation, 2) lower-than-expected increase in CPI to 7.3%YoY in March 2026, and 3) Pakistan securing Staff level agreement with IMF for US$1.2 billion. However, conflicting statements from Iran and the US, along with concerns over a possible ground invasion by the latter, created negative sentiment.

On the macroeconomic front, 2QFY26 GDP growth improved to 3.9%YoY as compared to 3.6%YoY in 1QFY26), while the trade deficit for March 2026 widened 4%YoY to US$2.7 billion.

Meanwhile, the government announced an increase in fuel prices, with HSD/MS rising by PKR184.5 and PKR137.2 per litre, respectively, after providing subsidies over the past 3 weeks.

On the sectoral front, OMC sales for March 2026 increased 19%YoY to 1.4 million tons, while cement offtakes rose 1%YoY during the same period.

Furthermore, T-Bill yields showed mixed movement, declining by 29/2bps for one-month and six-month papers, while three-month and twelve-month papers rose by 29bps and 25bps, respectively.

Other major news flow during the week included: 1) GoP secures Kuwait backing for fuel imports, 2) Pakistan, China release ‘five-point initiative’ to restore peace in the Middle East, 3) Pakistan, Afghan Taliban officials meet in China for ceasefire talks, 4) Iran allows 20 more Pak-flagged to pass through Hormuz, and 5) Foreign Exchange reserves held by State Bank of Pakistan increase by US$6 million to US$16.4 billion as of March 27, 2026.

Refinery, Woollen, and Transport emerged as top performing sectors, while Vanaspati & Allied Industries, Leather & Tanneries, and Cable & Electrical Goods were laggards.

Major selling was recorded by Mutual Funds with a net outflow of US$15.7 million, while Individuals absorbed most of the selling with a net buy of US$16.7 million.

Top performing scrips of the week were: TRG, CNERGY, ATRL, BAHL, and BAFL, while laggards included: SCBPL, GADT, KTML, SSOM, and PAEL.

According to AKD Securities, going forward, market sentiment will hinge on developments of the Middle East conflict. Concurrently, upcoming corporate results would also remain in the limelight as 3QFY26 results season approaches. Over the medium term, any de-escalation in the Middle East could spark a strong market rebound. The recent corrections have made valuations more attractive, with forward P/E now at 6.4x.

The brokerage house forecasts the KSE-100 Index to reach 263,800 by end December 2026.

Top picks of the brokerage house include: OGDC, PPL, UBL, MEBL, HBL, FFC, EN GROH, PSO, LUCK, FCCL, INDU, ILP and SYS.