PSX Weekly: KSE-100 ends bullish despite rate hike

KARACHI (Staff Report): The Pakistan Stock Exchange (PSX) witnessed a strong rally in the outgoing week, with the benchmark KSE-100 Index closing at 166,409 points, up 2.5% or 4,034 points week-on-week from 162,000 points last week, as hopes of progress in US-Iran talks supported market sentiment throughout the week.

According to Arif Habib Limited, the rally came despite the State Bank of Pakistan (SBP) raising key policy rates on Monday, October 26 by 50bps, taking the policy rate to 12%. The hike was delivered amid intensification of the Middle East conflict and its implications for forward inflation.

Market Drivers and Macro Cues

The report noted that between June’24 and July’26, the SBP conducted net foreign exchange interventions of $17.2 billion, while in July’26 net FX interventions were $863 million.

On the fixed income side, the government raised a total of PKR 1,913 billion against a target of PKR 1,650 billion in the T-bills auction. Overall yields went up by 25bps to 60bps, with most participation observed in the 3M tenor of PKR 879 billion.

Pakistan’s total liquid foreign exchange reserves clocked-in at $26.8 billion, down by $78 million, as SBP reserves increased by $33 million to $21.5 billion and banks’ reserves declined by $112 million to $5.2 billion. The import cover was largely stable at 3.02 months, as of 23rd Oct’26.

Oil and gas production for the week depicted a mixed trend, with oil production at 64,912 bopd, up by 8.9% WoW, while gas production settled at 3,063 mmcfd, declining by 0.36% WoW.

Petroleum prices under the daily pricing mechanism were on an upward trend, with MS up WoW by PKR 0.2/litre to PKR 377.9/litre, while HSD rose WoW by PKR 8.9/litre to PKR 400/litre.

The PKR appreciated marginally by 0.03%, closing at PKR 276.75/USD versus PKR 276.82/USD previously.

On the corporate front, the ongoing results season remained strong. KSE-100’s profitability (based on 96% of index weight) increased by 26% YoY to PKR 1,638 billion in 9MCY26, supported by broad-based earnings growth across most sectors, including Banks (1%), E&Ps (64%), Fertilizers (23%), Cements (17%), Power (18%), Auto Assemblers (25%), OGMCs (62%), Pharma (16%), Food (11%), Refineries (40x), Textile Composite (65%), Chemicals (39%), Leather (7%) and Others (44%).

Sector and Scrip Contribution

Sectors contributing positively were i) Banks (+1,384 pts) ii) Fertilizer (+854 pts), iii) Cement (+426 pts), iv) Investment Banks (+369 pts) and v) E&Ps (+323 pts). Whereas, sectors contributing negatively were i) Technology (-75 pts) ii) Miscellaneous (-41 pts), iii) Paper & board (-36 pts), iv) Chemical (-23 pts) and v) Leather & tanneries (-13 pts).

Scrip-wise positive contributions came from FFC (+699 pts), MCB (+354 pts), ENGROH (+350pts), UBL (+326 pts) and OGDC (+199 pts). Whereas, scrip-wise negative contributors were MEBL (-92 pts), SYS (-50 pts), PKGS (-36 pts), LCI (-34 pts) and PSEL (-32 pts).

Volume, Value and Indices

Average volumes arrived at 600 million shares (up 53% WoW), while the average value traded settled at $83 million (up 19% WoW). The PSX volume chart showed a consistent build-up during the week, from 376m shares on Oct 26 to 825m shares on Oct 30, with KSE-100 peaking at 166,500+ on Oct 29.

All major indices ended positive: KSE100 2.5% WoW to 166,409, KSEAll 2.1% to 100,708, KSE30 2.5% to 49,027, KMI30 2.3% to 237,972, BKTI 2.7% to 45,944 and OGTI 1.9% to 33,649. Year-to-date, the market remains up 4.4% in KSE-100 terms.

Market capitalization stands at PKR 18,389 billion ($66 billion), up 2.1% WoW, though still down 4.3% on CY26TD basis.

Volume leaders during the week were CNERGY with avg. vol of 75.6m shares closing at Rs13.6, PASL 66.4m at Rs4.0, KEL 29.1m at Rs5.8, TPLP 21.8m at Rs12.6, and PRL 20.9m at Rs97.0.

Major gainers in the KSE100 Index were GHNI (+18.6%), CNERGY (+10.0%), TGL (+10.0%), KOHC (+8.1%) and COLG (+7.2%). Major losers were PKGS (-8.2%), INIL (-5.7%), LCI (-5.5%), AGP (-4.9%) and IMAGE (-3.8%).

Outlook

Going forward, market direction is once again likely to remain sensitive to developments in US-Iran talks and the direction of the oil prices, AHL noted.

The KSE-100 Index is currently trading at a P/E of 7.1x offering a dividend yield of 7.0%. AHL’s top picks include OGDC, PPL, FFC, LUCK, MLCF, NBP, AKBL, HUBC, ENGROH, PSO, DGKC and SAZEW.