Budget, Eid holidays, US-Iran talks outcome to keep PSX gains in check

The Pakistan Stock Exchange Index faces a cautious week ahead, with the federal budget, Eid holidays, and the outcomes of the U.S.-Iran negotiations weighing on investor sentiment.

The index gained 1.36% last week, closing at 167,844.24 points, as easing geopolitical tensions and falling oil prices snapped bearish momentum.

What is the KSE-100 outlook for the coming week?

Analysts expected the near-term direction to depend on geopolitical developments and budget-related announcements.

According to brokerage house Arif Habib Limited, the market is expected to remain subdued as investors await clarity on FY27 fiscal measures.

Spectrum Securities warned that uncertainty around a possible U.S.-Iran ceasefire and shortened Eid trading sessions may keep sentiment cautious.

AKD Securities cited US-Iran negotiations, global oil prices, and the FY27 federal budget as key catalysts.

Prime Minister Shehbaz Sharif's visit to China from May 23 to 26, along with any ceasefire progress in the Middle East, could serve as positive triggers. The brokerage projected the KSE-100 could reach 263,800 points by December 2026.

Intermarket Securities said trading is expected to remain highly event-driven. Its tracked universe trades at around 8.1 times forward earnings, below the 9.3 times seen earlier this year.

What drove the KSE-100's weekly gain?

In the outgoing week, the index advanced in three of five sessions, rising 2,248 points week-on-week.

Improving sentiment around US-Iran negotiations reduced fears of oil supply disruptions through the Strait of Hormuz. International oil prices also fell 6% week-on-week, supporting equities. Profit-taking in the final session kept overall momentum in check.

Which sectors led gains on the Pakistan Stock Exchange?

Banking stocks contributed the most to weekly gains, adding 1,109 points to the index. Fertilizer stocks added 646 points, exploration and production companies contributed 219 points, and cement shares added 199 points.

Foreign investors remained net sellers, offloading equities worth $14.14 million. Selling was heaviest in banking stocks at $6.24 million, followed by cement at $4.51 million. Oil marketing companies attracted net foreign buying of $0.91 million.

Insurance companies were the largest local buyers, with net purchases of $13.41 million. Individual investors bought shares worth $3.70 million. Brokerage houses were the largest local sellers, offloading $3 million in equities.

How did the SLM Tyres IPO perform?

The SLM Tyres IPO attracted subscriptions of nearly PKR 70 billion, making it one of the most oversubscribed offerings in PSX history at 16.7 times the offered size.

Strong IPO participation provided an additional boost to overall market activity.

Auto financing rose 36.6% year-on-year to PKR 360 billion in April, also increasing 4.1% month-on-month.

The government exceeded its Pakistan Investment Bond auction target, raising PKR 652 billion against a target of PKR 350 billion. Strong participation was concentrated in 15-year bonds.