Markets to start the year take the PSX to the top

The KSE-100 index extended its new year rally to a fresh record, gaining nearly 4% on a weekly basis as strength in banking, energy and fertilizer stocks led to broad participation, market analysts said.

On a daily basis, the Pakistan Stock Exchange (PSX) recorded another strong session on Monday, with the KSE-100 index closing at a new all-time high of 173,896, up 1,496 points (+0.87%).

The stock market continued its positive momentum as the index closed on a strong note on Tuesday at a fresh all-time high of 174,472, gaining 576 points as the upward momentum remained intact throughout the session.

On Wednesday, the PSX signed a separate 2025 on a historic note, during which the KSE-100 soared to record highs above the 174,000 mark. On the last day of the year, however, the market saw a modest correction, falling 418 points, or 0.24%, to settle at 174,054.

The following day, the new year got off to a strong start as the index gained 2,301 points (+1.32%), reflecting continued investor optimism, to close the day at 176,355. The PSX continued to witness enhanced bullish momentum on Friday as the KSE-100 closed at 179,035, up 2,679 points (+1.52%).

Arif Habib Limited (AHL) noted that the KSE-100 rose from 172,401 last week to 179,035 this week, up 6,634 points (+3.9% WoW), supported by buying interest to open the year.

GDP growth in 1Q26 stood at 3.71%, improving from 1.56% in 1Q25 but easing from 6.17% in 4Q25, on the back of strong industrial growth of 9.4%, alongside agriculture and services expanding by 2.9% and 2.4%, respectively.

Through December 25, sales by oil marketing companies (OMCs) rose 6% year-on-year to 1.35 million tonnes, although volumes fell 5% year-on-year. On a cumulative basis, 1HFY26 OMC intake reached 8.16 million tonnes, reflecting a 2% year-on-year increase, AHL said.

Total refiner sales rose 0.9% year-on-year in December 25, supported by stronger motor and furnace oil absorption, which offset weaker high-speed diesel demand. Diesel sales fell 8.6% y-o-y to 396k tonnes, likely due to higher OMC imports amid a subdued price environment and heightened cross-border tensions. In contrast, furnace oil sales rose 11.1% year-on-year to 227k tonnes, mainly fueled by higher refinery exports, albeit at a loss.

The price of motor spirit fell by Rs 10.28/litre to Rs 253.17/litre, reflecting a reduction of Rs 11.09/litre in the refinery price, alongside an increase of Rs 0.81/litre in the Domestic Fare Equalization Margin (IFEM).

The price of high-speed diesel oil fell by Rs 8.57/litre to Rs 257.08/litre, following a reduction of Rs 9.59/litre in the refinery price and an increase of Rs 1.02/litre in the IFEM.

The Consumer Price Index (CPI) for December 25 stood at 5.6% y-o-y versus 6.1% in November 25. State bank reserves rose $12.6 million to $15.9 billion, while commercial bank reserves fell $23 million to $5.1 billion, AHL added.

JS Global’s Syed Danyal Hussain noted that the KSE-100 extended its bull run into the new year, closing at a record high of 179,034 points, up 4% WoW. The weekly rally was broad-based, led by banks (45% contribution), followed by research and production (18%) and fertilizers (13%). Market activity picked up, with average daily turnover up 41% WoW.

Pakistan’s economy grew by 3.71% in the first quarter of 2006, according to the National Accounts Commission, mainly due to a 9.38% year-on-year increase in industrial production, alongside agriculture (+2.89%) and services (+2.35%). In another positive development, CPI stood at 5.6% for December 25, down 0.5% MoM, he said.

On the external front, the trade deficit widened to $3.7 billion in December 25, up 24% year-on-year, largely reflecting a 20% drop in exports, while imports rose 2%. That brought the 1/26 cumulative trade deficit to $19.2 billion, up 35% year-on-year.

At the corporate level, PTCL completed the acquisition of Telenor Pakistan and Orion Towers, marking a major consolidation move in the telecom sector. Meanwhile, foreign exchange reserves remained stable, with the State Bank reporting reserves of $15.91 billion, Hussain added.