PSX benchmark index up 3.2%WoW

Pakistan Stock Exchange (PSX) witnessed positive momentum during the week ended on July 03, 2026. The improved outlook led to a strong rally in Banks. During the week the benchmark index gained 5,801 points and closed the week at 185,372 points, up 3.2%WoW. Despite a positive week, market participation measured by average daily traded volume declined by 32.5%WoW to 1.0 billion shares.

Market witnessed positive momentum, driven by lower-than expected inflation of 11.07%YoY in June 2026, as full year CPI remained in single digits at 7.05%YoY in FY26. This fueled sentiment around a potential policy rate cut later in the year as expectations for FY27 inflation remain subdued.

The aforementioned inflation also led to a decline in yields for 2, 3, 5, and 10-year tenors in Thursday’s PIB auction.

Positive talks in Doha between the US and Iran led to improved traffic in the Strait of Hormuz, though still below pre-war levels, bringing Brent near US$70/ bbl, further supporting investor confidence.

On the macroeconomic front, trade deficit rose to US$39.5 billion for FY26, up 22%YoY, as higher oil prices weighed on imports.

Foreign exchange reserves held by Pakistan at close of the fiscal year were reported at US$18.4 billion, marking a record high year-end level.

OMC sales declined marginally by 1%YoY in FY26 to 16,190,000 tons, led by higher oil prices.

Other major news flow during the week included: 1) Pakistan debt upgraded to ‘overweight’ by Barclays, 2) FBR achieved the revised tax collection target of PKR12,957 billion for FY26, 3) Middle East producers push on with oil/ LNG loadings despite ship attacks, 4) Pakistan eyes formal energy trade with Tehran, and 5) Pakistan and US discussed maritime cooperation.

Top performing sectors were: Jute, Sugar & Allied Industries, and Synthetic & Rayon, while laggards included: Textile Spinning, Leather & Tanneries, and Exchange Traded Funds.

Major buying was recorded by Mutual Funds and Companies of US$23.5 million and US$6.6 million, respectively. Major sellers were Insurance US$20.9 million and Individuals US$4.8 million.

Top performing scrips were: IBFL, TPLRF1, PTC, UBL, and JVDC, while laggards included: KEL, SRVI, MEHT, PABC, and SNGP.

According to AKD Securities, progress on US-Iran deal, along with moderating International oil prices towards pre-conflict levels would remain the key focus.

Additionally, favorable financial results for the period ended June 30, 2026 would support market sentiment in the near term.

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

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