Karachi: The KSE-100 Index experienced a decline of 1.6% over the past week, closing at 177,167 points compared to 180,105 points the previous week. The market's total capitalization decreased to $71.6 billion from $72.5 billion. Despite these declines, the average daily trading volume (ADTV) increased slightly by 0.3% to 1,053.4 million shares. The ongoing US-Iran conflict, nearing six months since its onset, has been a significant factor influencing market conditions, with Brent crude prices rising over 6% to $94.2 per barrel.

According to AKD Securities Limited, domestic adjustments included a brief reduction in High-Speed Diesel (HSD) prices by PKR 33 per liter on August 20, followed by an increase of PKR 1.64 to PKR 364.70 per liter. The Petroleum Minister indicated that refineries have complied with requests to lower prices. On the macroeconomic side, the Current Account Deficit (CAD) narrowed to $328 million in July, a 38% year-on-year decrease, aided by an increase in goods exports and strong remittance flows. The State Bank of Pakistan (SBP) forecasts the fiscal year 2027 CAD to be within 0-1% of GDP, with remittances projected at $44 billion. The SBP also raised PKR 518 billion through Treasury bills with yields between 11.47% and 11.99%. Sectorally, fertilizer offtakes for Urea and DAP declined by 5% and 10% year-on-year, respectively, while IT exports rose by 18% to $417 million.

Looking ahead, market improvements are anticipated based on strengthening economic indicators and easing geopolitical tensions, along with favorable financial results for June 2026. A potential US-Iran agreement could further stabilize international oil prices. The market is currently trading at attractive valuations, with a forward price-to-earnings ratio of 7.0x. Projections indicate the KSE-100 Index could reach 263,800 by December 2026, with top investment picks including OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP, and SYS.