Although foreign investors were net sellers, with outflows of $43 million, the market was buoyed by strong inflows from mutual funds, individuals, and corporates, totaling $95 million. Cement stocks led the charge, with MLCF rising 26%, DGKC 23%, and FCCL and CHCC each posting 22% gains.

In a boost to the country's economic outlook, Moody's Investors Service upgraded Pakistan's credit rating to Caa1, citing progress in reform implementation under the IMF's Extended Fund Facility program. The agency noted improvements in Pakistan's external position, with foreign exchange reserves exceeding $14 billion, though it cautioned about the reserves' fragility.

Despite these positive developments, Pakistan's current account recorded a deficit of $254 million in July. This was driven by a widening trade deficit as the domestic economy rebounded, leading to increased imports. However, export growth remained strong at 16% year-on-year, and remittance inflows, up 7% to $3.2 billion, continued to support the trade balance.

The country faces challenges from intense monsoon rains causing widespread flooding, particularly in Khyber Pakhtunkhwa and Punjab. The Ministry of Finance has warned of potential fiscal pressures on GDP growth and rising food inflation due to disruptions in agriculture and economic activities. The situation may affect key crops and industry demand, though international donors are poised to provide support.

Despite flood-related challenges, analysts remain optimistic about the equity market, citing potential domestic demand recovery, soft inflation, stable currency, and ongoing structural reforms. Key stock picks include OGDC, FFC, DGKC, CHCC, and MLCF, among others.