KARACHI: The Pakistan Stock Exchange (PSX) witnessed a strong rebound on Friday as investor sentiment improved amid easing geopolitical tensions in the Middle East and encouraging domestic economic indicators, prompting aggressive value buying after several cautious sessions.
The benchmark KSE-100 index surged by 3,642.49 points, or 2.01 per cent, to close at 185,099.83, marking one of the strongest single-day gains in recent weeks. Market participants attributed the rally to reduced fears of regional instability and renewed confidence in selected heavyweight stocks.
Sentiment was bolstered after United States President Donald Trump indicated that the situation surrounding protests in Iran was easing, alleviating concerns of a wider regional conflict that could disrupt global oil supplies. The perceived de-escalation encouraged investors to return to the market, resulting in broad-based buying across key sectors, including oil and gas, fertilisers and banking.
According to Topline Securities Ltd, the session was dominated by bullish activity, largely driven by local institutional investors. Major index movers included Oil and Gas Development Company, Pakistan Petroleum, Hub Power, Engro Holdings, Fauji Fertiliser, United Bank and Meezan Bank, which together contributed 1,725 points to the index’s overall gain.
Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said the market closed on a strong note due to improved global cues and supportive domestic data. He noted that the easing of geopolitical uncertainty in the Middle East triggered across-the-board buying and strengthened positive momentum at the local bourse.
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On the macroeconomic front, the government’s decision to keep petrol and diesel prices unchanged for the January 16–31 fortnight also provided some stability. Higher petroleum levies offset a decline in ex-refinery prices, while margins for oil marketing companies remained unchanged. The Inland Freight Equalisation Margin recorded a marginal decline.
Meanwhile, official data showed that large-scale manufacturing output grew by 10.4 per cent on a year-on-year basis in November 2025, reflecting improving industrial activity. However, month-on-month growth remained modest at 0.2 per cent. Inflationary pressures persisted, with the Sensitive Price Index rising 3.87 per cent year-on-year and 0.25 per cent on a weekly basis.
Trading activity picked up significantly, with total volumes rising 17.01 per cent to 959 million shares. The value of shares traded jumped 51.08 per cent to Rs69.46 billion. Arif Habib Corporation topped the volume chart, with 72.9 million shares traded.
Analysts believe the market could retest its all-time high of 187,905 in the coming week.https://t.co/62Fkn49Zo8
— Dawn Business (@dawn_business) January 17, 2026
Market analysts believe the PSX could test its all-time high of 187,905 points in the coming week, provided geopolitical stability continues and macroeconomic indicators remain supportive.
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