The benchmark KSE-100 Index of the Pakistan Stock Exchange (PSX) closed the week with a gain of 708 points, or 0.4% on a week-on-week basis, settling at 163,806 points. The market navigated a volatile trading environment marked by alternating phases of profit-taking and renewed buying interest, ultimately reflecting improving investor sentiment driven by macroeconomic and geopolitical developments.
Analysts at Arif Habib Limited noted that the week started with cautious selling as traders reacted to earlier uncertainties. However, sentiment shifted mid-week following encouraging updates on Pakistan’s engagement with International Monetary Fund (IMF), along with signs of easing geopolitical tensions and political stability, which fueled a wave of renewed optimism.
During the week, Pakistan secured a staff-level agreement with the IMF for the second review of the USD 7 billion Extended Fund Facility (EFF) and the first review of the USD 1.3 billion Resilience and Sustainability Facility (RSF). Upon approval by the IMF Executive Board, the agreement will unlock USD 1 billion under the EFF and USD 200 million under the RSF, strengthening the country’s external financing outlook.
On the economic front, the trade deficit widened by 33.8% year-on-year to USD 9.4 billion in the first quarter of FY26. For September alone, the trade gap stood at USD 3.4 billion. Meanwhile, the government successfully raised PKR 506.7 billion through Pakistan Investment Bonds (PIBs) and PKR 775.9 billion through Treasury Bills (T-Bills), exceeding its set borrowing targets and signaling improved investor confidence in the debt market.
Refinery upliftment, excluding furnace oil, rose by 21.6% compared to the same period last year, largely driven by higher demand for high-speed diesel (HSD). Oil production also recorded a modest increase of 1.3% week-on-week to 65,301 barrels per day. Additionally, foreign exchange reserves held by the State Bank of Pakistan climbed to USD 14.44 billion, offering further support to macroeconomic stability. The rupee remained stable, trading at PKR 281.10 per USD in the interbank market.
Market experts suggest that the momentum may continue as Pakistan approaches the IMF Executive Board’s approval, which is expected to boost investor confidence and liquidity. They also highlighted that the ongoing corporate results season is likely to drive stock-specific activity, particularly in key sectors such as banking, energy, and manufacturing.
Despite the upward trajectory, analysts also caution that volatility could persist due to external factors such as global oil price fluctuations and geopolitical developments. However, the overall tone in the market has turned optimistic as economic indicators improve and reforms advance.
With sustained foreign inflows, stable reserves, and renewed investor interest, the PSX may see further consolidation in the coming weeks, positioning the market for continued growth heading into the year-end.
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