KARACHI — Pakistan’s equity markets closed sharply higher on Thursday, with the KSE-100 index posting a near 1,000-point gain after a strategic energy agreement between Islamabad and Washington sparked a surge of investor confidence.
The benchmark index jumped 978 points, or 0.71%, to end the session at 139,390.42 — a fresh all-time high. The rally was primarily driven by robust gains in oil and gas exploration companies and renewed foreign interest in the energy and infrastructure sectors.
Investor Sentiment Soars on Breakthrough Energy Deal
The jump in market momentum followed the announcement of a landmark trade and energy cooperation deal between Pakistan and the United States. The agreement reportedly includes reduced barriers for Pakistani exports and U.S. investment support in key sectors like energy, IT, and infrastructure.
More significantly, the pact outlines American assistance in developing Pakistan’s untapped oil reserves — a move that investors interpreted as a game-changer for the country’s long-struggling energy sector.
Muhammad Hasan Ather of JS Global said the deal helped drive optimism across the board. “This is a comprehensive strategic pivot that could ease the energy crunch and attract critical foreign capital,” he noted.
Record July and Strong Macro Signals Drive Bulls
Thursday’s rally capped a strong month for the Pakistan Stock Exchange, with the KSE-100 climbing 11% in July alone, according to Topline Securities. Analysts attributed the performance to a mix of political stability, economic reforms, and supportive macro indicators.
Among the highlights:
- Inflation cools: June’s Consumer Price Index fell to 3.24%, raising hopes for sustained price stability.
- Current account turns positive: Pakistan recorded its first annual surplus in 14 years, posting a $2.1 billion positive balance.
- Remittances hit record: Overseas Pakistanis sent home $38.3 billion in FY25, including $3.4 billion in June — an 8% YoY increase.
- Auto demand returns: Car sales soared 64% YoY in June to 21,773 units, reflecting stronger consumer sentiment.
Topline said that a government-approved circular debt restructuring plan — targeting Rs1.275 trillion over six years — also helped cement investor confidence, particularly in energy stocks.
Energy Sector Leads as Oil Stocks Dominate
Trading action centered on oil and gas counters, buoyed by optimism over foreign involvement in local energy development.
- OGDC gained 3.66% to Rs233.01.
- Pakistan Oilfields rose 5.02%.
- Systems Limited was among the top gainers with a 7.5% jump.
Meanwhile, fertilizer and banking names struggled to keep pace. Fauji Fertiliser, Bank Alfalah, and Engro Fertilisers weighed on the index, with Alfalah slipping 2.1% after reporting a 31% drop in half-year earnings per share.
Market Breadth Strong Despite Mixed Corporate Results
The day saw a total of 577.3 million shares traded across 483 listed firms, up from 425.8 million the day before. Out of these, 235 stocks closed higher, 215 declined, and 33 ended flat. Total traded value stood at Rs36.3 billion.
The Bank of Punjab led in volume with over 83 million shares traded, followed by Invest Bank and OGDC. Despite the local optimism, foreign investors remained net sellers, offloading Rs146.7 million worth of shares, per data from the National Clearing Company.
Looking Ahead: Can the Rally Hold?
As the week heads to a close, the market remains cautiously optimistic. Arif Habib Limited noted that while resistance above the 140,000 level may limit immediate upside, the index has room to stretch further if macro trends hold.
“Momentum is clearly with the bulls,” AHL said, pointing to strong volumes and investor appetite in cyclical sectors. However, clarity on tariff adjustments and follow-up actions on the US deal will be crucial in sustaining the rally.
The KSE-100 is currently up 0.13% on the week, with traders eyeing the 140,500 mark as the next technical target.
