PSX registers modest growth

On Tuesday, the market experienced a modestly positive session, gaining 404 points (+0.23%) to close at 177,371. The bourse faced consolidation on Thursday as the index remained flattish at 177,323, down 48 points (-0.03%). The PSX registered another consolidation session on Friday, settling at 177,697, higher by 374 points (+0.21%).

Arif Habib Limited (AHL) observed that the KSE-100 index remained largely range bound during the outgoing week as the US-Iran conflict seemed to be moving towards a slow resolution, keeping investors cautiously watchful, while a public holiday further slowed trading activity. The index closed at 177,697 points, up 0.3% WoW (+530 points).

In a major development, AHL mentioned, Moody's upgraded Pakistan's credit rating to B3 from Caa1, while a stable outlook was maintained.

Additionally, the International Monetary Fund's (IMF) fourth Extended Fund Facility (EFF) review mission is set to visit Pakistan in September to assess progress on structural reforms, including the Sovereign Wealth Fund legislation, SOE governance, and anti-corruption measures, as authorities continue working through related legislative and institutional commitments,.

In other reports, the State Bank's net profit fell 20% year-on-year to Rs1.99 trillion in FY26, down from Rs2.499 trillion in FY25, with a surplus of Rs1.932 trillion remitted to the federal government.

Also, Pakistan's five major refineries are set to sign agreements under the Brownfield Refinery Upgradation Policy early next month, unlocking $6 billion in investment to enable domestic production of Euro 5-compliant fuels and reduce reliance on imported petrol and diesel. Petroleum prices rose under the new daily pricing mechanism.

Motor spirit went up Rs4.82 to Rs342.6/litre and high-speed diesel (HSD) increased Rs6.91 to Rs371.61/litre, tracking the seven-day Platts average. The petroleum levy, inland freight equalisation margin, and OMC margins remained unchanged.

Pakistan's liquid foreign currency reserves rose to $22.6 billion as of August 27, 2026 (up $81.3 million WoW), with State Bank reserves at $17.1 billion (+$16.6 million) and commercial bank reserves at $5.5 billion (+$64.7 million), taking import cover to 2.56 months. Pakistani rupee appreciated marginally by 0.02% and closed at Rs277.50/US dollar versus 277.56/$ previously.

"Going forward, market direction is likely to stay sensitive to geopolitical developments, while the ongoing earnings season, with largely decent results coming in so far, is expected to lend support to the overall market performance," AHL said.

Wadee Zaman of JS Global noted that the KSE-100 experienced a seesaw movement during the week, ultimately closing at 177,697, up 530 points (+0.3% WoW), as the US-Iran deadlock persisted despite stepped-up efforts by mediators to reopen the Strait of Hormuz. Resultantly, Brent crude prices fell 5% WoW to $89.7/barrel.

Domestically, fuel prices edged higher, with petrol rising Rs4.82 to Rs342.60/litre and HSD increasing by Rs6.91 to Rs371.61/litre. On the macro front, Zaman said, Moody's upgraded Pakistan's sovereign credit rating to B3 from Caa1, reflecting reduced external vulnerability and an improved risk profile.

Furthermore, an IMF mission for the 4th review of the Extended Fund Facility is expected to arrive next month.

Meanwhile, the Cabinet Committee on Privatisation (CCoP), in order to meet one of the fund's key requirements of privatising loss-making state-owned enterprises (SOEs), approved a restructuring plan for the first batch of three power distribution companies (DISCOs), while the Ministry of Privatisation planned to privatise two of the country's largest DISCOs by area, Lesco and Mepco, in their existing form.

Furthermore, the Petroleum Division was overhauling the gas tariff structure by transitioning from a 12-slab system to a single rate while reallocating targeted subsidies strictly based on household income. Lastly, the State Bank-held forex reserves remained stable WoW at $17.1 billion, Zaman added.