PSX benchmark index up 1.4%WoW

Pakistan Stock Exchange (PSX) posted recovery throughout the week, after jitter on the first trading day. The benchmark Index gained 2,248 points or 1.4%WoW to close at 167,844 points on Friday, May 22, 2026. Market participation declined, with average daily trading volume plunging to 747 million shares.

The dominant sentiment driver remained the prevailing US-Iran conflict, where early-week drone strikes on UAE nuclear facilities and Saudi Arabia weakened investors’ confidence.

However, sentiment recovered from the second trading session onward after US Vice President Vance confirmed progress in diplomatic talks, with both Pakistan’s Interior Minister and Field Marshal Asim Munir traveling to Tehran to help finalize a draft agreement.

Foreign exchange reserves held by State Bank of Pakistan (SBP) surged to US$17.1 billion as of May 15, 2026 due to IMF disbursements under EFF and RSF programs.

Pakistan’s current account posted a deficit of US$324 million for April 2026, as compared to US$12 million for the same period last year, as higher energy import costs widened the trade gap.

IT exports increased by 33%YoY to US$423 million for April 2026.

Urea offtakes surged by 85%YoY to 463,000 tons in April 2026.

Other major news flow during the week included: 1) Pakistan secured a US$1.2 billion Saudi oil facility alongside a US$320 million AIIB loan for N-5 highway reconstruction, 2) Pakistan and IMF agreed on FY27 macro framework with GDP growth at 4.1%, CPI at 8.6% and primary surplus at 2% of GDP, 3) T-Bill yields rose across all tenors during this week’s auction, 4) Government approved sale of 51% to 100% stakes in IESCO, GEPCO and FESCO, and 5) Pakistan reopened offshore oil and gas exploration after an 18-year pause, signing 23 deep-water block agreements with immediate investment of US$82 million.

Top contributing sectors were Oil & Gas Marketing Companies, Leather & Tanneries, and Technology & Communication, while the laggards included                                                                                                                                                                                                                                                                                                                                                                                                                                                           Textile Spinning, Leasing Companies, and Tobacco.

Major selling was recorded by foreigners, amounting to US$14.2 million. Major buyers were Insurance and Individuals with US$13.4 million and US$3.7 million respectively.

Top performing scripts were: PTC, SCBPL, SRVI, PIOC, and UBL, while laggards included:  GADT, MEHT, CNERGY, AICL, and MTL.

According to AKD Securities, Iran-US negotiations, oil prices and FY27 budget finalization remain key near term catalysts. Prime Minister’s visit to China (May 23-26) and any ceasefire development serving as potential positive triggers.

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