PSX rebounds 779 points as institutional buying returnsBusiness

Ali Najib, Deputy Head of Trading at Arif Habib Limited, said the market closed higher amid renewed institutional buying, fuelled by optimism over intensified diplomatic efforts to resolve the US-Iran conflict and expectations of easing geopolitical tensions. He added that the prime minister’s approval of the draft Auto Policy 2026-31 brought automobile stocks back into investors’ focus.

Auto stocks remained the talk of the town, closing in positive territory on optimism around the new five-year roadmap for the automotive sector. The draft policy aims to boost automotive exports to $6bn through tariff rationalisation, localisation and EV incentives, alongside export-linked incentives and stricter safety standards, subject to the requisite approvals, including IMF clearance.

On the index contribution front, heavyweights including Hub Power, Habib Bank, United Bank, Oil and Gas Development Company, Mari Energies, PPL, Fauji Fertilizer, Sazgar Engineering, Lucky Cement and Nishat Chunian Power collectively contributed 711 points to the benchmark, Business Recorder reported.

Meanwhile, the refinery sector remained under earnings pressure after the government reduced the high-speed diesel crack spread from $41.89 to $38 per barrel for three months.

Market activity weakened despite the bullish close: ready-market trading volume dipped 14.98 per cent to 379.9 million shares, although turnover rose 9.54 per cent to Rs21.2bn. Total market capitalisation expanded by Rs76.221bn to Rs18.385trn.

Pak Refinery topped the volume chart with 49.4 million shares, closing at Rs99.88 against Rs101.44 in the previous session, while Cnergyico PK followed with 40.07 million shares at Rs12.52. Among top gainers, Unilever Pakistan Foods rose Rs2,535.18 to Rs27,886.93, while on the losing side Pakistan Engineering fell Rs69.66 to Rs742.24.

Sectoral performance was predominantly positive: the automobile assembler index gained 0.81 per cent to 21,599.08, commercial banks rose 0.63 per cent to 57,391.82, and power generation and distribution climbed 2.12 per cent to 25,093.03. The tech and communication index was the exception, slipping 0.36 per cent to 3,142.54.

Analysts say institutional buying, optimism around US-Iran diplomacy and renewed interest in auto stocks could sustain the market’s positive momentum, but geopolitical uncertainty and evolving macroeconomic risks could keep volatility elevated, favouring a selective investment approach.