By Moaaz Manzoor

The Pakistan Stock Exchange (PSX) closed higher during the previous week, with the benchmark KSE-100 Index gaining 2,248 points, or 1.36 percent week-on-week, to settle at 167,844 points amid improving geopolitical sentiment linked to expectations of progress in US-Iran negotiations, reports Wealth Pakistan.

Investor sentiment strengthened during the week on hopes that continued diplomatic engagement between Washington and Tehran could reduce risks of oil supply disruptions and ease broader regional tensions. Market activity also received support from reports of Pakistan’s role in facilitating backchannel diplomatic efforts.

According to Arif Habib Limited (AHL), banking, fertilizer and energy stocks remained the key drivers behind the market’s positive performance.

A major highlight of the week was the record-breaking initial public offering (IPO) of Service Long March Tyres (SLM), which attracted investor interest worth around Rs70 billion and witnessed a historic oversubscription of 16.7 times, reflecting strong investor appetite for industrial and manufacturing-related listings at the PSX.

Sector-wise, banking stocks emerged as the largest contributor to the benchmark index, adding 1,109 points during the week. Fertilizer stocks contributed 653 points, followed by exploration and production companies with 219 points, power sector firms with 179 points and cement stocks with 178 points.

On the downside, investment banks weighed most heavily on the index, eroding 101 points. Auto assemblers reduced the index by 81 points, followed by oil marketing companies with 41 points, textile stocks with 35 points and insurance firms with 24 points.

At the company level, United Bank Limited (UBL) remained the biggest positive contributor, adding 752 points to the benchmark index. Fauji Fertilizer Company (FFC) followed with 528 points, while Hub Power Company (HUBC), Pakistan Petroleum Limited (PPL) and Bank AL Habib (BAHL) added 191 points, 185 points and 146 points, respectively.

Meanwhile, Engro Holdings (ENGROH) remained the largest negative contributor, dragging the index down by 103 points. Other laggards included Pakistan State Oil (PSO), Millat Tractors (MTL), Sazgar Engineering Works (SAZEW) and Bank Alfalah (BAFL).

Trading activity weakened during the week as investors adopted a cautious approach ahead of the federal budget and Eid holidays. Average daily traded volume declined 39.9 percent week-on-week to 498 million shares, while average traded value dropped 5.3 percent to $86.3 million.

Despite lower trading activity, the broader market continued to gain value. According to PSX and AHL data, KSE-All Market Capitalization increased by 1.2 percent week-on-week to Rs18,616 billion, while in dollar terms it rose 1.3 percent to $67 billion. On a calendar-year-to-date basis, however, market capitalization remained lower by 3.1 percent in rupee terms and 2.6 percent in dollar terms.

Commenting on market trends, Ali Najib, Deputy Head of Trading at Arif Habib Limited, said investor sentiment initially improved due to reports of progress in US-Iran negotiations and easing international oil prices.

However, he noted that profit-taking during the latter part of the final trading session pushed the benchmark index into negative territory on a day-on-day basis.

He said investors were also closely monitoring diplomatic developments after the UAE, Saudi Arabia and Qatar urged the United States to allow additional time for diplomacy with Iran, while US Secretary of State Marco Rubio also indicated some progress in negotiations.

AHL said the KSE-100 Index could remain range-bound during the coming week due to Eid holidays and continued investor caution ahead of the FY27 budget announcement.

Meanwhile, AKD Securities said Iran-US negotiations, oil price movements and finalisation of the federal budget would remain key near-term market catalysts, adding that the market continued to trade at attractive valuations.

Credit: INP-WealthPk