Karachi: Market volatility marked the week as Yemeni Houthi attacks on Saudi Arabia's East-West Pipeline led to the closure of a crucial export route, pushing Brent crude prices to a four-month high of $109.7 per barrel. Despite this, oil prices eased in the final two days, and the KSE100 index saw a recovery, closing the week with a gain of 372 points, or 0.22%, at 170,885 points.

According to AKD Securities Limited, domestic fuel prices rose in response to the oil price hike, with HSD and MS prices increasing by PkR26.9 and PkR20.0, respectively. The government has reintroduced austerity measures to conserve fuel. The State Bank of Pakistan (SBP) maintained the policy rate at 11.50%, aligning with market expectations. Additionally, the current account deficit narrowed by 70% year-on-year to $98 million in August, while SBP foreign exchange reserves reached a record high of $21.4 billion, providing more than three months of import cover for the first time in five years. Yields on 3 and 6-month T-bills declined by 21 and 20 basis points to 11.38% and 11.70%, respectively. Foreign direct investment increased by 80% year-on-year to $316 billion in August, with the auto industry and IT exports also reporting gains.

The market outlook remains positive, with expectations of improvement driven by strengthening economic indicators and an upcoming IMF review. A potential US-Iran deal could further moderate international oil prices. The KSE-100 Index is forecasted to reach 263,800 by December 2026, with key stock picks identified in various sectors.