PSX Benchmark Index Gains 0.22% Amidst Oil Price Volatility
Pakistan’s benchmark index closed at 170,885 points after a weekly gain of 372 points. The market absorbed geopolitical shocks while macroeconomic indicators showed improvement.
The Pakistan Stock Exchange benchmark index ended the week at 170,885 points. It gained 372 points, a 0.22% increase, during the period ending September 18, 2026. The market displayed volatility driven by external supply shocks. Domestic economic data provided a stabilizing counterweight.
Houthi attacks on Saudi Arabia’s East-West Pipeline closed a key export route. Brent crude prices rose to a four-month high of US$109.7 per barrel. Oil prices eased in the final two days of the trading week. This decline reduced fears of immediate supply disruptions. The index recovered as investors reassessed the risk of broader regional conflict.
Central Bank Holds Policy Rate
Pakistan’s central bank maintained the policy rate at 11.50% on Monday. This decision aligned with broad market consensus. The government reintroduced austerity measures to conserve fuel. The 3-month T-bill yield declined to 11.38% in the latest auction. The 6-month T-bill yield fell to 11.70%.
Macroeconomic Indicators Show Improvement
The current account deficit narrowed by 70% year-over-year to US$98 million in August 2026. Foreign exchange reserves reached a record high of US$21.4 billion. This level provides import cover of over three months for the first time in five years. Foreign direct investment increased by 80% year-over-year to US$316 million in August.
Auto industry sales rose by 11% year-over-year to 17,485 units in August. IT exports grew by 17% year-over-year to US$394 million. Cotton arrivals increased by 19% year-over-year to 2.4 million bales as of September. These sectoral gains contributed to the broader market sentiment.
Market Activity and Outlook
Individuals were the largest net buyers with US$11.0 million. Banks added US$2.6 million to their positions. Mutual funds sold US$12.7 million, the largest net selling group. Foreigners exited positions worth US$3.4 million. Synthetic and Rayon, Leasing, and REITs led sectoral gains. Textile Weaving, Paper and Board, and Leathers lagged.
AKD Securities expects market improvement driven by strengthening economic indicators. The upcoming IMF review is identified as a key near-term catalyst. A potential US-Iran deal could moderate international oil prices. The brokerage forecasts the index to reach 263,800 by the end of December 2026. Current valuations remain attractive despite recent volatility.
