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Public finance

Karachi Stock Exchange Closes Week on a Positive Note Amid Economic Optimism

Strategic Insights

— 2 min read

The Pakistan Stock Exchange (PSX) closed the week with a modest gain of 0.4% on a week-on-week (WoW) basis, with the benchmark KSE-100 index posting a noteworthy increase. Investor sentiment remained upbeat early in the week, driven by the federal budget for FY26, which left capital gains and dividend tax rates unchanged, signaling moves towards fiscal consolidation without imposing a fresh burden on the equity market. However, the momentum cooled towards the weekend amid geopolitical tensions triggered by Israeli strikes on Iran and the US imposing a 50% tariff on steel imports from key trading partners.

Key Takeaways:

  • The benchmark KSE-100 index posted a modest gain of 0.4% on a WoW basis, with a notable increase of 384 points and a record high close on Tuesday.
  • The federal budget for FY26 maintained the status quo on equity taxes and signaled economic recovery, with a revenue target of Rs19.3 trillion and a fiscal deficit of 3.9% of GDP.
  • The market welcomed the plans to secure $2 billion in commercial financing to bolster the State Bank's reserves, further lifting investor confidence.
  • Large-scale manufacturing (LSM) output in March recorded a 1.8% year-on-year (YoY) uptick, while remittances for May surged to $3.7 billion, the second-highest monthly inflows on record.
  • The T-bill auction during the week raised Rs853 billion for the government, with yields softening up to 25 basis points.
  • Domestic car sales in May recorded a 35% YoY jump, with average daily traded volumes rising 37% WoW and traded value climbing 33%.
  • Analysts noted that the market's sentiment was impacted by geopolitical tensions, with the KSE-100 losing 1,950 points on Friday.
  • The KSE-100 hit an all-time high of 124,353 points during the week, reporting 2.2% gains in the first two sessions.

Statistics:

  • KSE-100 index gain on a WoW basis: 0.4%
  • Increase in KSE-100 index on Tuesday: 384 points
  • Revenue target for FY26: Rs19.3 trillion
  • Fiscal deficit for FY26: 3.9% of GDP
  • Total assets of the State Bank: $46 billion
  • Remittances for May: $3.7 billion
  • T-bill auction: Rs853 billion (target: Rs900 billion)
  • Domestic car sales in May: 14,762 units (up 35% YoY)
  • Average daily traded volumes: 907 million shares (up 37% WoW)
  • Traded value: Rs37 billion (up 33%)
  • KSE-100 all-time high: 124,353 points
  • KSE-100 gain in the first two sessions: 2.2%

Sources:

  • The Express Tribune: "PSX closes week on a positive note amid economic optimism"
  • Topline Securities: "Weekly Review"
  • JS Global: "PSX Welcomes FY26 Budget with No Adverse Steps for Capital Markets"
  • Federal Budget for FY26
  • State Bank of Pakistan: "Total Assets"

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