KSE-100 Rises 3% WoW as Geopolitical Tensions Ease in Pakistan

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Pakistan Stock Exchange closed the week on a strong note, with the benchmark KSE-100 Index gaining 3.03 percent on a week-on-week basis to settle at 181,430.02 points.

The index added 5,335.90 points during the week ended August 7, up from 176,094.12 points recorded the previous week. Market capitalisation also grew, rising by Rs150.62 billion to reach Rs5.154 trillion.

Analysts linked the rally mainly to improving confidence around regional security after Pakistan, Saudi Arabia and Turkiye signed the Makkah Joint Defence Agreement. Under the pact, the three countries agreed to treat an attack on any one of them as an attack on all.

Investor sentiment was also supported by growing hope that the United States, Iran and Oman could reach a temporary agreement over shipping routes through the Strait of Hormuz. Topline Securities said this optimism played a key role in pushing the index higher through the week.

Trading was not without volatility, though. The market opened strong on Thursday, with the KSE-100 gaining nearly 1,762 points to cross the 180,000 mark, but gave back some ground on Friday as concerns resurfaced over oil prices and the Hormuz situation.

The index slipped by 346.57 points on the final trading day of the week, closing slightly lower after touching an intraday high of over 181,600 points. Despite the Friday dip, weekly gains held firm.

Sector-wise, commercial banks contributed the most to the index’s rise, adding 1,919 points, followed by cement, fertiliser, and oil and gas exploration companies. Power generation, technology, and automobile assembler stocks also added to the positive momentum.

On the economic front, Pakistan’s headline inflation eased to 9.2 percent year-on-year in July, down from 11.1 percent in June, even though prices rose slightly on a month-on-month basis. This easing in price pressures added to the overall positive mood among investors.

Brokerage houses said the market’s direction going forward will continue to depend on how geopolitical developments in the Middle East unfold, along with upcoming corporate earnings and any changes in monetary policy.