KARACHI: The Pakistan Stock Exchange (PSX) extended its bearish run for a second consecutive week as heightened Middle East tensions, renewed Houthi attacks on Saudi Arabia, escalating US-Iran hostilities and fears of oil supply disruptions weighed on investor sentiment.
The benchmark KSE-100 index fell 4,817 points, or 2.75 per cent, week-on-week, to 170,512 points from 175,329 points last week, according to Arif Habib Ltd (AHL). Market activity also weakened, with average volumes declining 16.6pc to 639.1 million shares, while average traded value fell 18.7pc to $97.3 million.
According to AKD Securities, attacks along key shipping routes and continued Houthi strikes on Saudi energy facilities heightened concerns over global energy supplies. Brent crude climbed to a four-month high of $109 per barrel before retreating on Friday, allowing a modest recovery in the local market on the final trading day.
Domestic fuel prices also rose under the new daily pricing mechanism, with petrol rising to Rs375.82 and high-speed diesel (HSD) to Rs403.32.
Benchmark index sheds 4,817 points amid regional tensions and IMF review concerns
The refinery sector was among the biggest losers, down 4.2pc week-on-week after reports that the government was considering capping HSD refining margins at $30 per barrel.
Sector-wise, banks dragged the index down by 1,605 points, followed by cement (732 points), exploration and production companies (575 points), fertiliser (286 points) and investment banks (254 points). Miscellaneous stocks contributed 247 points, while insurance added 49 points.
Among individual stocks, Pakistan Services Ltd contributed 283 points and Adamjee Insurance 49 points to the index. United Bank Ltd was the largest negative contributor, deducting 475 points, followed by Lucky Cement at 256 points, Habib Bank Ltd at 229 points, Engro Holdings at 215 points and Bank Al Habib at 206 points.
Despite market weakness, several economic indicators improved. Overseas Pakistanis sent $3.7 billion in remittances in August, up 17pc year-on-year and 1pc month-on-month. Remittances during the first two months of FY27 rose 15pc year-on-year to $7.3bn.
Foreign exchange reserves also strengthened. Total liquid reserves increased 5.3pc week-on-week to $23.7bn as of Sept 4, with State Bank of Pakistan reserves rising $1.2bn to $18.3bn. Commercial banks’ reserves remained broadly stable at $5.4bn, taking import cover to 2.74 months from 2.56 months.
Oil production increased 1.8pc week-on-week to 68,400 barrels per day, supported by higher flows from Adhi, Kunnar Pasakhi Deep and Sharf fields. Gas production rose 2pc to 3,088 million cubic feet per day, led by higher output from Mari and Uch and the resumption of Shewa production at 68mmcfd.
The cement sector also posted stronger annual earnings. Its FY26 profits rose 13pc to Rs138bn, supported by a 7pc increase in despatches to 50.5 million tonnes, utilisation of around 60pc and a 33pc decline in finance costs.
Meanwhile, the rupee edged up 0.03pc to Rs277.32 against the dollar from Rs277.41.
The International Monetary Fund is expected to begin its Pakistan review on Sept 23 under the $7bn Extended Fund Facility and $1.4bn Resilience and Sustainability Facility. The mission is expected to remain until early October for the fourth EFF and third RSF reviews.
Other key developments included approval of the draft auto policy for 2027-31, pending IMF endorsement, a 58pc year-on-year rise in Roshan Digital Account inflows to $259m in August, and the clearance of a Qatari LNG cargo bound for Pakistan through the Strait of Hormuz.
Moody’s said Pakistan had absorbed the latest conflict shock better than the 2022 crisis, citing improved macroeconomic conditions.
AHL analysts expect market direction to remain sensitive to the US-Iran conflict, the monetary policy decision and the IMF review. AKD expects improving economic indicators and a possible easing of international oil prices following a US-Iran agreement to support the market. The KSE-100 is trading at a forward price-to-earnings multiple of about 7.2 times, offering an attractive valuation backdrop.
Published in Dawn, September 13th, 2026
