KSE-100 Weekly Close
150,399
▼ 0.9% –1,309 pts week-on-week
Daily Vol (Avg)
604m shares
Vol Change WoW
▼ 31%
P/E Ratio
7.4×
Dividend Yield
6.8%

Karachi: The Pakistan Stock Exchange endured another volatile week as a historic surge in domestic petroleum prices — driven by tightening global oil supplies amid escalating tensions in the Middle East — unsettled investor sentiment and revived fears of renewed monetary tightening. Rising import costs, particularly for petroleum products and LNG, alongside weakening exports to Gulf markets, have begun to strain Pakistan's fiscal outlook.

⚠ Fiscal Pressure Concerns deepened following reports that Pakistan is set to repay $2–3 billion to the UAE this month after the facility was not rolled over — adding significant pressure on already fragile foreign exchange reserves.

Historic Fuel Price Surge

The week's most immediate shock came from domestic fuel prices, which saw unprecedented increases. The Consumer Price Index accelerated to 7.3pc year-on-year in March — the highest reading since August 2024 — compared to 7.0pc in February. The following table outlines the latest fuel price changes:

Fuel Type New Price (Rs/Litre) Change Levy / Notes
High-Speed Diesel (HSD) Rs520.35 ▲ Rs184.90 PDC removed; levy raised by Rs55.24/litre
Petrol (MS) Rs458.41 ▲ Rs137.24 Petroleum levy reduced to zero

Macroeconomic Snapshot

Macroeconomic indicators painted a mixed picture for the week. GDP growth for the second quarter of FY26 was reported at 3.89pc, led by the industrial sector at 7.4pc, followed by services at 3.69pc and agriculture at 1.76pc.

3.89%
GDP Growth Q2 FY26
Industry led at 7.4%
$2.7bn
Trade Deficit (March)
Exports ▼14% YoY
$2.3bn
Exports (March)
Down 14% year-on-year
$5.0bn
Imports (March)
Down 5.4% year-on-year
Rs81.4tr
Public Debt (H1 FY26)
Up 1.1%; $290.6bn total
$16.4bn
SBP FX Reserves
Up $6.2m on the week

Money Markets & FBR Collections

In the money market, the government raised Rs776.9 billion in a Treasury Bill auction against a target of Rs750 billion. Yield movements were mixed: the one-month and six-month papers declined by 29 basis points and 3 basis points respectively, while the three-month and 12-month yields rose by 29 basis points and 25 basis points respectively.

📊 FBR Revenue — March 2026 Federal Board of Revenue collections for March stood at Rs1,185 billion — up 8pc year-on-year but missing the monthly target by Rs182bn. Cumulative 9MFY26 collections reached Rs9,307bn, falling short of the annual target by Rs610 billion.

The rupee remained largely stable during the week, appreciating marginally by 0.025pc to close at 279.17 against the US dollar. The State Bank of Pakistan's foreign exchange reserves edged up by $6.2 million to $16.4 billion, while commercial bank reserves rose by $47.8 million to $5.4 billion.

Sectoral Performance

Despite the broad market weakness, some sectors demonstrated resilience. Refinery throughput increased 13pc year-on-year, supported by higher output of both HSD and petrol, while overall production rose 13.9pc with capacity utilisation at 58pc. Petroleum product sales grew 19pc to 1.44 million tonnes in March, led by HSD (up 21pc), petrol (up 16pc) and furnace oil (up 62pc). Cement despatches rose slightly by 0.9pc to 3.74 million tonnes, supported by export demand amid subdued domestic activity.

▲ Top Gaining Sectors
  • Refinery
  • Woollen
  • Transport
▼ Top Lagging Sectors
  • Vanaspati
  • Leather
  • Cable

Geopolitics & Investor Flows

Market sentiment remained closely tied to geopolitical developments and sharp fluctuations in international oil prices. Early-week optimism — supported by diplomatic efforts suggesting possible de-escalation in the Middle East, lower-than-expected initial inflation data, and Pakistan securing a staff-level agreement with the IMF for $1.2 billion — was subsequently offset by conflicting signals from the region and concerns over potential military escalation.

✅ Positive Developments Pakistan secured Kuwait's backing for fuel imports, engaged in diplomatic outreach with China and regional stakeholders to ease tensions, and saw limited relief in shipping flows through the Strait of Hormuz. A staff-level IMF agreement for $1.2 billion was also secured during the week.

Trading activity weakened significantly, with average daily volumes declining 31pc week-on-week to 604 million shares. Mutual funds emerged as the largest net sellers, offloading $15.7 million worth of equities, while individual investors absorbed the bulk of the selling pressure with net purchases of $16.7 million.

Valuations & Outlook

Analysts expect market direction to remain sensitive to developments in the Middle East and the start of the March quarter corporate earnings season. Earnings announcements over the coming weeks are expected to provide clearer guidance on the impact of fuel cost pressures on corporate margins across key sectors.

P/E Ratio
7.4×
Div. Yield
6.8%
Fwd P/E
6.4×
According to AKD Securities, any easing of geopolitical tensions could trigger a rebound — recent corrections have made valuations notably more attractive, with forward price-to-earnings ratios near 6.4 times.

Pakistan's public debt composition stands at Rs55.4 trillion in domestic debt (68pc of total) and Rs26 trillion in external obligations (32pc). The fiscal position remains under pressure, and markets will be watching closely whether the UAE repayment obligation is resolved through a new roll-over arrangement or draws down existing foreign exchange reserves further.