Karachi: Market pressures persisted throughout the past week, with investor sentiment dampened by ongoing uncertainty surrounding the US-Iran conflict and increased global energy prices. Oil prices remained high for much of the week, reaching US$105.3 per barrel, driven by supply chain concerns and China's halt of oil product exports, despite a recovery in Gulf crude supply. Consequently, the KSE-100 Index fell by 2,610 points, or 1.5% week-on-week, closing at 168,155 points. Trading activity also saw a 45% decrease week-on-week, with an average daily trading volume of 647 million shares.

According to AKD Securities Limited, Brent crude prices dropped to US$99.5 per barrel towards the end of the week as the United States increased pressure on Europe to release diesel reserves. On the domestic front, high-speed diesel prices decreased by PkR12.8 per liter (3.1% week-on-week) to PkR399 per liter, while motor spirit prices rose by PkR1.4 per liter (0.35% week-on-week) to PkR391 per liter. Inflation for September 2026 was recorded at 10.3% year-on-year, down from 11.2% in August 2026, influenced by disinflationary trends in food prices. The trade deficit for September 2026, however, widened by 6% year-on-year to US$3.6 billion. An International Monetary Fund mission began policy discussions in Islamabad on the fourth review of the Extended Fund Facility and the third Resilience Sustainability Facility review, aiming to unlock US$1.2 billion in combined disbursements. Additionally, the Federal Board of Revenue collected PkR3.1 trillion in the first quarter of FY27, exceeding the IMF-agreed target b y PkR13 billion. In monetary developments, the State Bank of Pakistan raised PkR853 billion through a T-bill auction, with cut-off yields increasing by 61/75/45 basis points across the 3-month, 6-month, and 12-month papers, respectively.

Looking ahead, AKD Securities Limited anticipates market improvement driven by strengthening economic indicators, with the forthcoming IMF review as a crucial short-term catalyst. A potential US-Iran agreement could also help stabilize international oil prices. The market continues to trade at appealing valuations, with a forward price-to-earnings ratio of 7.2x. The KSE-100 Index is forecasted to reach 263,800 by December 2026, with top stock picks including OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP, and SYS.