Market Surge Driven by Geopolitical Easing
Pakistan's stock market recorded a 3.6 percent month-on-month increase in June, a leading brokerage firm said in its report on Tuesday, citing improved investor confidence due to the United States-Iran peace deal as the main driver of the surge. The US and Iran signed the Islamabad Memorandum of Understanding, an interim peace deal mediated by Pakistan, this month following months of conflict that drove oil prices higher and created inflationary pressures worldwide.
While tensions persist over the Strait of Hormuz with the leaderships of Iran and the US exchanging threats frequently, easing geopolitical tensions have reduced concerns over regional instability and oil price volatility, the report said. It added that this has led investors to increase their exposure to equities.
KSE-100 Index Performance
“The KSE-100 Index recorded a 3.6 percent month-on-month increase, primarily driven by improved investor sentiment following the ceasefire/peace agreement between the United States and Iran,” the report said. The benchmark index closed the month higher, reflecting renewed confidence among market participants.
Macroeconomic Indicators
The report also highlighted key economic data. Pakistan’s Consumer Price Inflation (CPI) for May was recorded at 11.66 percent compared to April’s 10.89 percent. However, the country’s trade deficit in May was clocked in at $2.58 billion, down by 14 percent year-on-year and 39 percent month-on-month. Pakistan’s Finance Division said in a report on Tuesday that inflation is anticipated to remain within the 11-12 percent range this month.
Other positive developments included remittances for May 2026, which were recorded at $4.3 billion, reflecting an increase of 15 percent year-on-year and 20 percent month-on-month. Additionally, Pakistan’s current account surplus for May 2026 was recorded at $459 million compared to a deficit of $276 million recorded in April 2026, according to the report.
Market Participants and Trading Activity
Insurance companies and individuals were major sellers in the stock market this month, Topline Securities said, with net equity sales worth $55 million and $25 million respectively. “Mutual funds were major buyers in the market, as they net purchased equities worth $46 million as of yesterday's close,” the report added.
The average daily traded volume and value during the month stood at 836 million shares and Rs39 billion ($140.3 million), respectively, indicating robust activity on the exchange.
