KARACHI, Pakistan: The Pakistan Stock Exchange (PSX) ended the week on a volatile note, grappling with the dual challenges of devastating floods in Punjab and Khyber Pakhtunkhwa and ongoing political turbulence. The benchmark KSE-100 index dropped by 0.59%, closing at 148,617 points, reflecting nervous investor sentiment and heightened uncertainty.
Despite the midweek slump, a late surge fueled by strong corporate earnings in key sectors like cement and construction materials helped the market recover 1,274 points, offering a glimmer of hope for investors looking for stability in turbulent times.
Sectors in Focus
- Gainers: Cement, jute, property, and cable sectors outperformed, benefiting from expectations of reconstruction activity in flood-hit areas.
- Losers: Textiles, pharmaceuticals, and insurance companies lagged behind, with woollen, leather, and textile spinning stocks posting notable losses as economic concerns deepened.
Valuations and Forecasts
Market analysts noted that the forward Price-to-Earnings (P/E) ratio for 2026 remains at 7.90x, still lower than the 10-year average of 8.59x, while dividend yields stand at an attractive 6.8%. Experts predict that if macroeconomic and political stability is restored, the index could rally towards 165,215 points by year-end, supported by robust earnings in banking and fertilizer sectors and optimism around the new Electric Vehicle (EV) policy (2025–2030).
The Bigger Picture
Pakistan’s market performance continues to reflect historical patterns, where natural disasters and political noise often lead to sharp dips in equities. However, rebuilding efforts, particularly in the construction and cement industries, typically trigger periods of rebound and growth. Analysts also warn that without swift reforms and stable governance, volatility is likely to persist.
As investors await clarity on both political and economic fronts, the coming weeks will be critical in determining whether PSX can regain steady momentum or remains stuck in a cycle of uncertainty.
This story has been reported by PakTribune. All rights reserved.