Karachi: The stock market concluded the week on an upward trajectory, gaining 408 points or 0.24%, closing at 167,086 points on Friday. The appointment of Field Marshal Asim Munir as Chief of Defense Forces and the extension of Saudi Arabia's US$3.0 billion deposit were key factors in stabilizing mid-week volatility. However, market participation saw a decline of 22% week on week, with the average traded volume dropping to 863 million shares from 1.1 billion shares the previous week.
Externally, the trade deficit expanded by 33% year on year to US$2.9 billion in November 2025, fueled by a 5% increase in imports and a 15% decrease in exports. Headline inflation aligned with expectations at 6.1% year on year for the same month. Meanwhile, the government's debt decreased by PkR908 billion for the fiscal year to date.
Sector-wise, the cement and exploration and production sectors significantly contributed to the index's gains, adding 535 points and 351 points, respectively. The cement sector's rally was driven by a 2% year-on-year growth in local dispatches and an announcement of foreign expansion by Lucky Cement. The exploration and production sector benefited from progress in the LNG diversion plan and the successful auction of offshore blocks that attracted Turkish investment.
Looking ahead, market experts anticipate continued momentum in the KSE-100, bolstered by the recent approval of the IMF's second review, minimal flood impact, and improved credit ratings by global agencies amid falling fixed income yields. Investor sentiment is expected to be further buoyed by potential foreign portfolio and direct investment flows, aided by enhanced relations with the United States and Saudi Arabia.
The outlook is deemed favorable due to limited alternative investment avenues and attractive valuations of local equities, with the KSE-100 trading at a multiple of 7.7 times and offering a dividend yield of 6.7%. Top investment picks highlighted include MEBL, MCB, HBL, OGDC, PPL, PSO, ENGROH, LUCK, DGKC, FCCL, ILP, and INDU.