Karachi: The stock market experienced gains during the past week, driven by ongoing diplomatic initiatives aimed at resolving the Middle East conflict. These efforts included a Qatar-mediated proposal between the United States and Iran to reopen the Strait of Hormuz and peace talks between Russia and Ukraine in Abu Dhabi. The developments contributed to a reduction in international oil prices, with Brent crude falling by 3% to $96.1 per barrel by Friday. As a result, the KSE100 Index concluded the week at 177,874 points, marking a 2.3% increase, and the average daily trading volume reached 1.3 billion shares, a 24% rise.

According to AKD Securities Limited, on the macroeconomic front, worker remittances rose by 14% year-on-year to $3.9 billion in October, leading to total remittances of $14.8 billion for the first four months of the fiscal year, also up 14% year-on-year. Additionally, the fiscal surplus amounted to PKR 1.3 trillion in the first quarter, while the primary surplus reached PKR 3.0 trillion. Central government debt decreased by 1% for the fiscal year to date, standing at PKR 82.7 trillion as of September. The government successfully raised PKR 551 billion through the latest Treasury bill auction, exceeding the target of PKR 400 billion, with cut-off yields declining across various tenors. The State Bank of Pakistan's foreign exchange reserves increased by $11 million to $21.6 billion, providing an import cover of 3.1 months. Domestically, petrol and high-speed diesel prices dropped by PKR 20.6 per liter and PKR 22.3 per liter, respectively, representing a 6% weekly decline. In the automotive sector, passenger car sales surged by 60% year-on-year to 21,635 units in October, driven primarily by increased sales of lower-displacement cars.

Looking ahead, market analysts expect further improvements supported by strengthening economic indicators. Positive developments in the Middle East conflict could lead to moderation in international oil prices, potentially triggering monetary easing. The market remains attractively valued, with a forward price-to-earnings ratio of 6.4x, and top stock picks include OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP, and SYS.