Karachi: Market activity showed volatility during the shortened trading week, as the benchmark KSE-100 Index initially declined in the first two trading days but rebounded in the final session, closing at 179,571 points, marking a 0.4% increase for the week. Average daily trading volume increased to 1.5 billion shares, up from 1.4 billion shares in the previous week.

According to AKD Securities Limited, the week witnessed geopolitical developments with the U.S. and Iran agreeing on a 60-day roadmap aimed at a final deal, influencing international oil prices to continue their decline due to anticipated smoother crude flows through the Strait of Hormuz. The sentiment was bolstered by the Iranian President's visit to Islamabad. Additionally, the National Assembly approved a PkR18.8 trillion expansionary FY27 budget, deemed favorable for sectors such as cement, steel, refineries, textiles, pharmaceuticals, and technology, along with a reduction or elimination of super tax for individuals and corporations.

On the consumer front, petrol prices were lowered, with motor spirit and high-speed diesel prices reduced by PkR74 per liter and PkR67 per liter, respectively. In the monetary sector, the T-bill auction saw a significant drop in cut-off yields across all tenors. Broad money (M2) increased by 9.2% fiscal year-to-date to PkR44.2 trillion as of June 12, driven primarily by a 2.8% week-on-week rise in scheduled bank deposits.

Looking ahead, the progress on the U.S.-Iran deal and international oil prices will remain focal points. A decrease in inflation due to lower oil prices and favorable financial results for June 2026 are expected to support market sentiment in the near term. The market continues to trade at appealing valuations, with a forward price-to-earnings ratio of 7.1x. AKD Securities forecasts the KSE-100 Index to reach 263,800 by December 2026, recommending top picks such as OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP, and SYS.