KARACHI: The Pakistani stock market kicked off the week on an upbeat note as the KSE-100 index was up 875.56 points (or 0.47 percent) at 186,247.76 in the early minutes of trade on Monday. Buoyant buying pressure was observed in various sectors in response to the favorable international crude oil prices, reduced geopolitical risks in the Middle East, as well as an encouraging domestic macro-economic environment.
Buy Pressure Spreads Out Across Broader Sectors
A buy pressure was witnessed across sectors right at the start of the session. The sectors witnessing new buying included automotives assembly, cement, commercial banks, fertilizers, oil and gas exploration firms, oil marketing companies as well as refineries. In terms of major stock indices, some of the stocks that made it to the green side of the board were Attock Refinery, HUBCO, Mari Petroleum, OGDC, POL, PSO, MCB Bank, Meezan Bank and NBP.
The wide range of sectors involved is indicative of the fact that the strength seen in the morning was due to genuine confidence and not position playing on one or two key players. Movement together of banks, energy, cement and automobile stocks usually signifies that both institutions and retail players were operating together.
Last Week Gained More Than 3 Percent – Upward Momentum Persisting
The upward start this Monday is a continuation of the previous week’s momentum. The KSE-100 Index continues to be trading higher after the KSE-100 Index made gains of 5,800.93 points last week, which means that the KSE-100 Index gained 3.2 percent on the week, ending at 185,372.20 points.
Crude Oil Prices Plunge Further; Easing Inflationary Pressures
The key externality which is contributing the most towards the positive performance of the KSE-100 index is the sustained fall in international crude oil prices. The price of Brent crude oil witnessed a drop by 0.6 percent to around $71.70 per barrel. However, the United States saw its crude fall by 0.5% to $68.38 per barrel. The OPEC+ nations have chosen to produce 188,000 barrels per day of crude oil in the month of August.
However, there has been no change in the traffic in the Strait of Hormuz where 160 ships have moved across from Monday to Saturday last week. Thus, the open transit of crude oil in the strait eliminates the risk of a supply disruption that previously supported higher oil prices due to the US-Iran crisis.
ALSO READ: PSX Surges Higher With KSE-100 Up 600 Points
Positive Domestic Macro Backdrop Lingers
The optimism that prevails in the performance of the KSE-100 index is because of a relatively improved backdrop of domestic macroeconomic fundamentals. The SBP left the interest rates unchanged at 11.5 percent in the last MPC meeting for FY26 because of an overall stable scenario even when the headline inflation reached 11.7 percent in the month of May. Foreign exchange reserves of the SBP rose to $17.2 billion by the beginning of June after passing the IMF reviews successfully, while the government recorded a primary budget surplus of 2.5 percent of GDP in FY26.
With earnings season also approaching domestically, investors will be paying attention to the earnings performance of listed corporations in various industry sectors including banking institutions, energy firms and industrials. In light of declining oil prices, steady interest rates and positive external reserves, there is potential for Pakistani corporate earnings to beat expectations in these large industry sectors.
Nayab Fatima is a media professional specializing in fact-based journalism, research, and analytical reporting on technology, telecom, aviation, and automobiles.
