Karachi: The KSE-100 index experienced a turbulent week, initially trending downward before rebounding by 1,836 points on Friday, ultimately closing at 184,174 points. The index saw a weekly decline of 4,992 points, or 2.6%, largely influenced by the State Bank of Pakistan's decision to maintain the policy rate at 10.5%, contrary to market expectations, and escalating geopolitical tensions between the United States and Iran. Lower than expected quarterly results from Fauji Fertilizer Company also contributed to the market downturn. However, the easing of geopolitical tensions provided some relief to market sentiment.

According to AKD Securities Limited, the banking sector reported the second highest annual growth in deposits, ending the year at PKR 37.4 trillion. The State Bank of Pakistan also adjusted the average Cash Reserve Requirement for banks from 6% to 5%, aiming to stimulate private sector credit growth. Market participation increased slightly, with average daily trading volume rising by 3% week-over-week to 1.40 billion shares. Foreign exchange reserves held by the central bank increased by $13 million over the week, reaching $16.1 billion as of January 23rd. The Pakistani rupee appreciated marginally by 0.03% against the US dollar, closing at 279.77 PKR/USD.

In other developments, the government set a GDP growth target of 5.1% for the FY26-27 federal budget, while the State Bank revised GDP growth forecasts upward to 4.75% for FY26. Additionally, the International Monetary Fund praised Pakistan's reform efforts, and circular debt flow declined to PKR 75 billion in the first half of FY26. Sector-wise, Property, Jute, Vanaspati and Allied Industries, and Automobile Assemblers performed well, whereas Fertilizer, Chemical, Insurance, Paper and Board, and Textile Spinning sectors faced declines. Individual investors and foreign buyers were net purchasers, whereas mutual funds and banks were net sellers. Among companies, JVDC, SAZEW, KEL, MTL, and PPL emerged as top performers, while GADT, HCAR, FFC, AICL, and LCI were among the top laggards.