KARACHI: Buoyed by improving macroeconomic indicators and renewed investor confidence, the Pakistan Stock Exchange (PSX) extended its bullish spell during the outgoing week, with the KSE-100 index gaining 3.2 per cent week-onweek to close at a record 138,597.36.

This rally, driven by strong corporate earnings expe ctations, foreign interest, and local mutual fund activity, reflects growing optimism in the country`s economic turnaround, especially after the posting of the highest current account surplus in over two decades.

According to Topline Securities Ltd, sustained buying from local mutual funds supported market sentiment, while average daily traded vol-ume and value stood at 763 million shares and Rs35.89bn ($126m), respectively.

Despite some intermittent profittaking, Arif Habib Ltd (AHL) noted that the index advanced 4,298 points over the week, moving from 134,299.8 to 138,597.37.

Macroeconomic indicators continued to show resilience. Pakistan recorded a current account surplus of $328m in June, pushing the FY25 cumulative surplus to $2.1bn, compared to a deficit of $2.07bn in FY24 the highest surplus in 22 years.

Foreign Direct Investment (FDI), however, slightly declined to $207m in June from $217m in May.

In a significant development, the government raised Rs342bn in a fixed bond PIB auction against a target of Rs300bn, with cut-off yields falling by 30-54 basis points, indicating reduced borrowing costs and improved investor appetite.

Meanwhile, the State Bank`s for-eign exchange reserves rose by $23m to $14.5bn, the highest since March 2022. The rupee, however, depreciated marginally by 41 paise week-on-week, closing at Rs284.87 per US dollar.

AKD Securities Ltd noted that sectoral updates also pointed to recovery. Large-Scale Manufacturing (LSM) output rose by 2.3pc year-onyear in May and 7.9pc on a monthly basis. However, LSM output contracted 1.2pc year-on-year during 11MFY25. Auto-financing showed consistent improvement, increasing 20pc year-on-year to Rs277bn in June, up 2pc from the previous month, marking the seventh consecutive monthly rise. Fertiliser offtake also improved, with urea sales up 21pc year-on-year in June.

On the policy front, the government unveiled the National Tariff Policy 2025-30 to rationalise tariffs and bolster export competitiveness.

Pakistan`s economic team also metwith Moody`s to present its case for a ratings upgrade, underscoring its commitment to structural reforms.

Flows during the week revealed net selling of $34m by banks/DFIs, while individual investors absorbed the bulk with net buying of $22.3m.

Among top-performing stocks were Pakistan Services Ltd (55.4pc), Allied Bank Ltd (23.3pc), Javedan Corporation (18.6pc), Fauji Fertiliser Company (15.7pc), and Pakistan International Bulk Terminal (13.5pc).

On the flip side, the worst performers included The Searle Company (9.1pc), Kohinoor Cement (7.5pc), and Bannu Woollen Mills (6.8pc).

Sector-wise, vanaspati and allied industries led the gains, rising14.9pc week-on-week, followed by property (12.7pc), miscellaneous (12.4pc), fertiliser (11.1pc), and investment banks, companies and securities (7.3pc).

Conversely, jute saw the steepest decline at 13.2pc, while woollen (6.8pc), textile spinning (5.1pc), engi-neering (4.1pc), and leather and tanneries (3.7pc) were among the week`s worst-performing sectors.

Other key developments included IT exports for FY25 rising 18pc to $3.8bn, banking sector deposits increasing to Rs35.5tr in June, and Pakistan-Afghanistan trade reaching $1bn in 1HCY25. The telecom sector welcomed ADB`s push for lower taxes, and the cabinet approved a 15pc hike in EOBI pensions. China also expressed readiness to expand cooperation with Pakistan in agriculture, industry, and mining.Analysts maintain a bullish view for the weeks ahead. According to AKD Securities Ltd, the market is expected to remain positive, driven by strong earnings, stable macro fundamentals, and easing interest rates. With the KSE-100 trading at a forward price-to-earnings ratio of 7.1x against a 10-year average of 8.0x and offering a dividend yield of 7.4pc, equities remain attractively priced.