Karachi: The stock market experienced a week of fluctuating fortunes, initially buoyed by positive reception to the Federal Budget, but later dampened by rising geopolitical tensions. The KSE-100 Index reached a peak midweek, closing at an all-time high of 124,353 points, driven by optimism surrounding a potential rate cut anticipated in the upcoming Monetary Policy Committee meeting on June 16, 2025.
However, the market's momentum slowed as geopolitical tensions escalated following Israel's attack on Iran, causing the index to settle at 122,144 points by week's end. Despite this, the index still posted a weekly gain of 503 points, or 0.4%. Trading activity saw a notable increase, with average daily traded volumes rising by 37.3% to 907 million shares.
Macroeconomic indicators showed mixed results. Worker remittances for May 2025 totaled $3.7 billion, and foreign exchange reserves held by the State Bank of Pakistan increased by $167 million, reaching $11.7 billion. The auto sector reported a 19% year-on-year increase in sales for May 2025, driven by demand for passenger cars and light commercial vehicles.
The Pakistani Rupee depreciated slightly, closing the week at 282.96 against the US dollar. Key developments included the government targeting 4.2% real GDP growth for FY26, projecting a $2.1 billion current account deficit, and imposing a PKR 2.5 per liter carbon levy on petroleum products. Tax relief measures were announced for the salaried class, and Pakistan secured a $700 million loan for the Reko Diq project.
Sector performance varied, with Woollen, Textile Spinning, and others leading gains, while Refinery and Technology sectors lagged. Foreign investors recorded net selling of $7.4 million, while Banks/DFI made net purchases of $8.0 million. Top-performing companies included PKGP and BNWM, while POML and FCEPL were among the decliners.
Looking ahead, the market is expected to maintain a positive outlook, with the federal budget perceived as favorable. Analysts forecast an upward trajectory for the KSE-100, targeting 165,215 points by December 2025, driven by strong earnings in key sectors and economic stability.