Investor sentiment down

KARACHI: Heightened political and geopolitical tensions, coupled with uncertainty surrounding the Strait of Hormuz and a sharp rise in international oil prices, weighed on investor sentiment at the Pakistan Stock Exchange (PSX), pushing the benchmark KSE-100 Index down during the week ended August 21, 2026. The benchmark KSE-100 Index opened the week at 180, 104. 61 points and closed at 177, 166. 52 points, shedding 2, 938. 09 points or 1. 6 percent week-on-week. The decline came amid renewed concerns over the Strait of Hormuz, which pushed Brent crude prices up 8 percent week-on-week to around USD 94 per barrel. The increase in international oil prices was accompanied by a rise in domestic petrol prices, while diesel prices declined following government intervention in the diesel crack spread. The broader market also remained under pressure, with the total market capitalisation of the PSX declining 1. 2 percent in rupee terms to Rs19, 882. 97 billion from Rs20, 130. 30 billion a week earlier. In dollar terms, market capitalisation fell by 1. 2 percent to USD 71. 63 billion from USD 72. 50 billion. The Business Recorder indices reflected a mixed performance in the broader market during the week. The BRIndex100 opened at 19, 856. 60 points and closed at 19, 505. 26 points, recording aggregate weekly turnover of 3. 49 billion shares. The BRIndex30, meanwhile, opened at 72, 452. 79 points and finished at 72, 811. 74 points, with total weekly turnover of around 2. 27 billion shares. The week’s decline came despite a number of developments pointing towards improvement in Pakistan’s domestic economic indicators. Market participants continued to monitor developments surrounding regional tensions, energy prices and external financing, while domestic economic data provided some support to investor confidence. According to JS Global Research, uncertainty surrounding the Strait of Hormuz was a major factor behind the increase in international crude prices. Brent crude rose 8 percent during the week to around USD 94 per barrel. On the domestic front, petrol prices increased by Rs12. 35 per litre week-on-week to Rs337. 78 per litre. In contrast, high-speed diesel prices declined by Rs19. 25 per litre to Rs364. 70 per litre after the government capped the diesel crack spread at USD 41. 5 per barrel, compared with an international margin of around USD 68 per barrel. The measure resulted in an estimated Rs32. 63 per litre reduction in diesel prices. Another major development during the week was the Petroleum Division’s submission of a Rs1. 49 trillion gas circular debt settlement plan to the Council of Common Interests (CCoE), against total gas circular debt of Rs3. 6 trillion. The proposed plan includes Rs540 billion in dividends from Oil and Gas Development Company Limited (OGDC), Pakistan Petroleum Limited (PPL) and Ghani Global Holdings Limited (GHGL), a Rs5 per litre additional petroleum levy and savings generated through reduced LNG cargoes. The external sector continued to show pressure, with Pakistan recording a current account deficit of USD 328 million during the period covered by the report. The deficit was narrower than the USD 814 million recorded in June 2026 and the USD 529 million deficit in July 2025. At the same time, industrial activity remained on a positive trajectory. Large-Scale Manufacturing (LSM) output increased 1. 8 percent year-on-year in June 2026, taking cumulative FY26 growth to 5 percent. The broader market news flow also included reports that Pakistan’s LSM index rose 5 percent year-on-year in FY26. In the domestic debt market, the State Bank of Pakistan (SBP) raised Rs518 billion through a Treasury Bill auction against a target of Rs500 billion. Yields increased by around 10 basis points across the various tenors. Meanwhile, SBP-held foreign exchange reserves remained unchanged week-on-week at USD 17. 08 billion. Other major news flow during the week included Pakistan’s efforts to secure Qatar LNG cargoes for August 25-26 as spot prices surged, developments aimed at moving Pakistan-China business-to-business agreements from memorandums of understanding towards actual investments and exports, a reported Rs364 billion increase in circular debt during FY26, and an agreement between Pakistan and Norway to enhance cooperation and ties across various sectors. Trading activity on the readyboard remained relatively stable in terms of volume, although the value of transactions increased. Readyboard average daily turnover declined 0. 9 percent week-on-week to 845. 71 million shares from 853. 27 million shares previously. However, the average daily traded value increased 7. 5 percent to Rs41. 02 billion from Rs38. 14 billion, while the dollar value rose 7. 6 percent to USD 147. 75 million from USD 137. 35 million. Sector-wise trading activity remained heavily concentrated in refinery-related stocks. Refineries accounted for 33 percent of total market volume during the week, followed by Oil Marketing Companies (OMCs) at 8 percent, Technology and Communication at 7 percent, Food at 5 percent and Textile Spinning at 5 percent. The remaining 42 percent of market volume was attributed to other sectors. The refinery sector also emerged as the strongest performer during the week, gaining 8. 7 percent. OMCs followed with an increase of 3. 1 percent, while Exploration and Production companies rose 1. 8 percent and engineering stocks gained 0. 8 percent. Chemical stocks declined 0. 1 percent, Food fell 0. 9 percent, Technology and Communication declined 1. 1 percent, Autos fell 1. 2 percent, Pharmaceuticals dropped 1. 7 percent, Cement 2. 0 percent, Fertilizer 2. 1 percent, Textile Composite 2. 5 percent, Power 2. 8 percent, while Banks recorded the steepest sectoral decline of 3. 3 percent. The individual stock performance also showed considerable divergence. PGLC emerged as the leading KSE-100 gainer, rising 32. 1 percent to Rs19. 39. Attock Refinery Limited (ATRL) increased 7. 7 percent to Rs1, 117. 47, Pakistan State Oil (PSO) gained 7. 1 percent to Rs375. 45, INIL rose 6. 5 percent to Rs177. 63, Cnergyico PK Limited (CNERGY) advanced 5. 6 percent to Rs14. 45, Pakistan Petroleum Limited (PPL) increased 4. 4 percent to Rs240. 66, while BNWM rose 4. 3 percent to Rs69. 90. On the other hand, Thal Limited (THALL) was the biggest decliner among the listed KSE-100 stocks, falling 9. 4 percent to Rs521. 12. Cherat Cement Company Limited (CHCC) declined 7. 7 percent to Rs304. 40, TGL fell 6. 3 percent to Rs180. 21, Pakistan Aluminium Beverage Cans Limited (PABC) dropped 6. 0 percent to Rs101. 46, Pak Elektron Limited (PAEL) declined 5. 7 percent to Rs40. 40, AGP Limited fell 5. 6 percent to Rs177. 94, while Gadoon Textile Mills Limited (GADT) lost 5. 4 percent to close at Rs319. 24. Overall, the week’s 1. 6 percent decline reflected continued sensitivity of the domestic equity market to geopolitical developments and international energy prices, despite the presence of improving domestic economic indicators and continued efforts to strengthen the country’s fiscal, external and industrial position. Copyright Business Recorder, 2026

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