KARACHI:
Pakistan’s fairness market closed the week on a cautious notice because the benchmark KSE-100 index slid 2.6% week-on-week to settle at 184,175 factors, weighed down by heightened geopolitical tensions, disappointing company earnings, and the State Financial institution of Pakistan’s (SBP) choice to maintain the coverage fee unchanged regardless of market expectations of a reduce.
Investor sentiment remained subdued for a lot of the week, with volatility amplified by rollover week pressures, though selective shopping for emerged within the closing session following authorities aid measures for the commercial sector and supportive macro indicators from the central financial institution.
On a day-on-day foundation, the PSX ended the range-bound session on Monday at 188,588, down 579 factors (-0.31%). The market skilled a largely uneventful session on Tuesday because the KSE-100 index moved sideways and closed at 188,203, down 385 factors (-0.20%).
Wednesday additionally noticed sideways motion, when the index ended greater by 178 factors (+0.09%) at 188,380. On Thursday, the PSX witnessed a pointy sell-off, fuelled by geopolitics, the place the KSE-100 plunged by 6,042 factors (-3.21%) to settle at 182,338. Nonetheless, the bourse loved a powerful reversal of development on Friday, surging 1,836 factors (+1.01%) to shut at 184,175.
Arif Habib Restricted (AHL), in its weekly commentary, famous that the KSE-100 index remained sluggish over the outgoing week, registering a lack of 4,993 factors (-2.6% WoW) at 184,175. Market sentiment stayed cautious, influenced by escalating geopolitical tensions, Fauji Fertiliser Firm’s (FFC) 4QCY25 outcomes coming in beneath market expectations (given FFC’s 9.5% weight within the KSE-100), establishment on the coverage fee (in opposition to expectations of a reduce), and rollover-week dynamics.
On January 26, the SBP saved the coverage fee unchanged at 10.5% and shared its macro outlook, projecting FY26 GDP progress at 3.75-4.75%, a present account deficit of 0-1% of GDP, and secure inflation at 5-7% over FY26 to FY27.
To help liquidity and personal sector credit score, the SBP diminished the money reserve requirement (CRR) for banks, reducing the common fortnightly CRR from 6% to five% and the minimal each day CRR from 4% to three%, AHL talked about.
Banking deposits elevated by 23.6% YoY to Rs37.4 trillion as of Dec’25 (Rs30.3 trillion as of Dec’24), whereas investments jumped by 30.1% YoY to Rs37.9 trillion. Fuel output climbed to three,197 mmcfd within the third week of Jan’26, the very best since Jan’25, whereas oil manufacturing rose to 67,066 bpd, marking the strongest degree since Aug’24.
Energy sector round debt stood at Rs1.7 trillion as of Dec’25 (vs Rs2.4 trillion in Dec’24 and Rs1.8 trillion in Nov’25). SBP-held overseas reserves rose by $13.4 million to $16.1 billion whereas the Pakistani rupee appreciated barely in opposition to the US greenback, strengthening 0.03% WoW to shut at Rs279.80/USD.
Syed Danyal Hussain of JS International said that the KSE-100 remained beneath stress through the week, closing at 184,175 factors, down 2.6% WoW, as investor sentiment weakened following the MPC choice to maintain the coverage fee unchanged, opposite to expectations of a 50-100-basis-point (bps) reduce, whereas rising geopolitical tensions additional compounded market uncertainty.
The bourse, nonetheless, staged a modest restoration on the ultimate buying and selling session after the federal government introduced aid measures for the commercial sector, together with a 300bps discount within the Export Finance Scheme (EFS) fee and a reduce in energy tariffs by Rs4.04/unit.
In a significant improvement, the Federal Constitutional Court docket (FCC) upheld the legality of the tremendous tax, overturning earlier excessive court docket rulings in opposition to it. The choice is anticipated to help income assortment, with the FBR projected to generate over Rs300 billion in extra revenues in FY26, Hussain stated.
In the meantime, Pakistan repaid greater than Rs3.65 trillion in debt forward of schedule over the previous 14 months. Energy sector round debt move additionally declined to Rs75 billion in 1HFY26, bringing the cumulative inventory all the way down to Rs1.68 trillion. On the sectoral entrance, the SBP diminished the common CRR for business banks from 6% to five% to help credit score enlargement to the personal sector. Lastly, the SBP’s reserves remained secure at $16.1 billion, he added.
