By Moaaz Manzoor

The Pakistan Stock Exchange (PSX) remained volatile during the week ended March 13, 2026, as escalating tensions in the Middle East weighed on investor sentiment and kept market participants cautious, reports Wealth Pakistan.

The KSE-100 Index closed at 153,866 points, down 2.30% week-on-week, shedding 3,630 points during the week. The market came under pressure after a sharp rise in global oil prices linked to tensions between the United States and Iran, although it later recovered part of its losses.

According to Arif Habib Limited, the State Bank of Pakistan kept the policy rate unchanged at 10.5%, maintaining a cautious stance amid rising uncertainty stemming from the Middle East conflict and volatile global commodity prices. The brokerage house noted that the performance of the KSE-100 Index next week will largely depend on geopolitical developments, while the approaching Eid holidays may also influence market dynamics.

Sector-wise, banks made the largest negative contribution to the benchmark index, eroding 1,156 points, followed by cement with 870 points, fertilizer with 806 points, auto assemblers with 360 points, and power with 341 points. On the positive side, investment banks added 505 points, followed by technology with 83 points, insurance with 66 points, refinery with 62 points, and leather and tanneries with 33 points.

On a company-wise basis, United Bank Limited was the largest drag on the index with a negative contribution of 899 points. It was followed by Fauji Fertilizer Company with 619 points, Lucky Cement Limited with 362 points, The Hub Power Company Limited with 310 points, and Sazgar Engineering Works Limited with 209 points. Meanwhile, Engro Holdings Limited contributed 515 points to the index, followed by Systems Limited with 140 points, Adamjee Insurance Company Limited with 66 points, Bank Al Habib Limited with 49 points, and Attock Refinery Limited with 49 points.

Trading activity showed a mixed trend during the week. Average daily volumes stood at 451 million shares, up 31.4% week-on-week, while the average value traded settled at $95 million, down 27% week-on-week. Among volume leaders, K-Electric Limited topped the list with an average daily volume of 54.3 million shares, followed by The Bank of Punjab with 29.3 million shares and Hascol Petroleum Limited with 22.3 million shares.

Commenting on market performance, Ali Najib, Deputy Head of Trading at Arif Habib Limited, said the Pakistan Stock Exchange ended the final session on a subdued note, with the KSE-100 Index closing at 153,866, down 555 points or 0.36% from the previous close. He said investor activity remained muted during the shortened Ramadan trading session as participants stayed cautious ahead of the weekend amid geopolitical concerns. According to him, market direction in the coming sessions will largely depend on geopolitical developments.

Arif Habib Limited said the benchmark index is currently trading at a price-to-earnings ratio of 7.7 times, with a dividend yield of around 6.6%. Its preferred picks include National Bank of Pakistan, Oil and Gas Development Company Limited, Pakistan Petroleum Limited, Fauji Fertilizer Company, Lucky Cement Limited, The Hub Power Company Limited, Pakistan State Oil, and Attock Refinery Limited.

Meanwhile, AKD Securities said market sentiment going forward is likely to remain tied to developments in the ongoing Middle East conflict, while the government’s energy conservation measures and the ongoing International Monetary Fund review will also remain in focus. The brokerage house noted that any de-escalation in the conflict could trigger a significant recovery, as the recent correction has made valuations more attractive, with the forward price-to-earnings ratio at 6.6 times. It expects the KSE-100 Index to reach 263,800 points by December 2026.

Credit: INP-WealthPk