By Moaaz Manzoor

The Pakistan Stock Exchange (PSX) extended its gains during the final week of June, with the benchmark KSE-100 Index advancing 649 points, or 0.36% week-on-week, to close at 179,571 points, as easing geopolitical tensions in the Middle East helped sustain investor confidence despite rollover-week pressures.

The market remained resilient throughout the week as investors welcomed the signing of a peace memorandum of understanding and improving prospects for a US-Iran deal, developments that pushed international oil prices lower and strengthened expectations of easing inflation.

According to Arif Habib Limited (AHL), exploration and production companies provided the biggest boost to the benchmark index, contributing 365 points during the week. Cement stocks added 352 points, followed by leather and tanneries with 126 points, textile composite companies with 71 points and the power sector with 64 points.

On the downside, banking stocks emerged as the largest drag on the market, shaving 226 points off the benchmark index. Technology stocks reduced the index by 85 points, while investment banks, fertiliser companies and refinery stocks also made negative contributions.

At the company level, Oil and Gas Development Company remained the largest positive contributor, adding 196 points to the benchmark index. United Bank Limited contributed 145 points, followed by Pakistan Petroleum Limited with 141 points, Service Industries with 126 points and Maple Leaf Cement Factory with 109 points.

Among the laggards, Bank AL Habib erased 158 points from the index, while Bank Alfalah reduced it by 115 points. Habib Bank Limited, Fauji Fertilizer Company and Pakistan State Oil also weighed on overall market performance.

AKD Securities said the market remained supported by optimism surrounding progress on a potential US-Iran agreement, declining global oil prices and expectations of favourable corporate earnings for June 2026. It added that easing inflationary pressures and improving macroeconomic conditions continue to underpin investor sentiment, while the market remains attractively valued with a forward price-to-earnings ratio of 7.1 times.

Despite the weekly gain, AHL data showed that average daily trading volumes declined 30% week-on-week to 808 million shares, while average daily traded value fell 41% to $134 million.

Despite the lower weekly volumes, investor interest strengthened on the final trading day. Ali Najib, Deputy Head of Trading at Arif Habib Limited, said the benchmark index gained 1,878 points on Wednesday as broad-based buying emerged ahead of the extended holidays. He attributed the rally to optimism over improving geopolitical developments.

Looking ahead, analysts expect the market to maintain its positive momentum as investors continue to monitor developments surrounding the US-Iran negotiations and international oil prices. Lower inflation, improving expectations of monetary easing and attractive market valuations are also expected to support sentiment. According to AHL, the KSE-100 Index is currently trading at a price-to-earnings ratio of 8.3 times and offers a dividend yield of 6.1%, while its preferred picks include OGDC, PPL, Fauji Fertilizer Company, Lucky Cement, National Bank of Pakistan, Hub Power Company, Pakistan State Oil and Attock Refinery Limited.

Credit: INP-WealthPk