PSX falls 3.6% WoW amid geopolitical tensions, domestic political noise: report

Pakistan Stock Exchange (PSX) remained volatile during the week ended on February 20, 2026, due to persistent geopolitical tensions between the U.S. and Iran, coupled with domestic political noise, according to a note by AKD Research.

The benchmark index declined by 6,434 points, or 3.6%, during the week to close at 173,170 points on Friday. 

Market participation also slowed with the start of Ramadan, as average daily traded volumes declined by 22% WoW to 831 million shares, compared to 1.1 billion shares in the prior week.

Meanwhile, developments on the economic front remained encouraging, as the country posted a current account surplus of $121 million in Jan’26, against a deficit of $393 million in the same period last year, primarily driven by higher workers’ remittances. Industrial activity (LSMI) expanded by 4.8% YoY in 1HFY26, led by growth in the automobile and textile sectors. 

Additionally, the government notified an approximately PkR 5/kWh reduction in industrial tariffs, higher than initially announced by the Prime Minister in the previous month. Furthermore, power generation increased by 12% YoY in Jan’26, supported by the incremental industrial power tariff package and imposition of a gas levy on CPPs. However, fertilizer offtakes declined by 48% YoY during Jan’26, mainly due to elevated channel inventory following advance procurement in the prior month.

SBP-held FX reserves increased by US$19 million WoW to stand at US$16.2 billion as of Feb 13, 2026. Other major news flow during the week included: 1) IMF review mission to arrive on 25 Feb’26, 2) Pakistan's bonds drawing the biggest foreign inflows in 19 months during Jan’26, 3) IT exports increasing by 19% YoY during Jan’26, 4) textile exports rising by 1.3% YoY during 7MFY26, and 5) RDA inflows crossing the US$12 billion mark during Feb’26.

Sector-wise, Vanaspati & Allied Industries and Woollen were among the top performers, up 2.9% and 1.2% WoW, respectively. On the other hand, Refinery, Modarabas, and OMCs declined by 12.5%, 9.8%, and 8.4% WoW, respectively.

Flow-wise, during the first four trading sessions, major net selling was recorded by foreigners with a net sell of US$26.5 million. Individuals and banks absorbed most of the selling with net buys of US$14.4 million and US$12.1 million, respectively.

Company-wise, top performers during the week were: i) INIL (up 9.0% WoW), ii) SSOM (up 8.2% WoW), iii) THALL (up 7.1% WoW), iv) BNWM (up 1.2% WoW), and v) MUREB (up 0.7% WoW). Top laggards were: i) PIOC (down 22.2% WoW), ii) TRG (down 16.1% WoW), iii) UNITY (down 13.9% WoW), iv) PSO (down 11.8% WoW), and v) MEHT (down 10.9% WoW).

AKD Research expect the market to recover as domestic and geopolitical uncertainties subside, with the market trading at attractive valuations of a forward P/E of 7.3x and a dividend yield of 6.4%. 

“We forecast the KSE-100 Index to reach 263,800 by Dec’26. Furthermore, investor sentiment is expected to improve on the likelihood of foreign portfolio and direct investment flows, driven by improved relations with the US and KSA,” the brokerage firm said.