Karachi: The Pakistan Stock Exchange (PSX) experienced a turbulent first quarter of the fiscal year 2027, as the KSE-100 Index recorded a decline, losing 10,332 points or a 5.7% drop year-to-date, closing at 169,969 points on September 30, 2026. The market's downturn was attributed to escalating geopolitical tensions, particularly between the United States and Iran, and uncertainties surrounding the Strait of Hormuz's reopening. These factors contributed to elevated international oil prices, which adversely impacted Pakistan's inflation and external account outlook.
According to information available from the Pakistan Stock Exchange (PSX), geopolitical uncertainty was further exacerbated by the expiration of the US-Iran Memorandum of Understanding (MoU) in August without renewal, coupled with stalled peace negotiations that pushed Arab Light crude prices above USD 110 per barrel during September. Despite certain positive domestic developments, including an upgrade by S&P Global Ratings of Pakistan's sovereign credit rating to 'B' with a stable outlook and the State Bank of Pakistan's foreign exchange reserves reaching an all-time high of USD 21.4 billion, market sentiment remained cautious.
The local currency depicted a minor move against the US dollar, appreciating by 0.4% to 277.1 during the quarter. Headline inflation, driven by higher global oil prices, averaged 10.2% during the first quarter of FY27, indicating a big move compared to the previous year's 4.3%.
The equity market saw major net selling by mutual funds, banks, and foreign investors, with outflows of USD 64.2 million, USD 36.2 million, and USD 2.84 million, respectively. These outflows were predominantly absorbed by individuals and corporates, with inflows of USD 92.8 million and USD 25.4 million, respectively. Average trading volumes for the KSE-All Index declined to 748.5 million shares, down from approximately 834.1 million shares in the preceding quarter, while the average trading value saw a decrease of 12.6% to near USD 118.5 million.
Sectors such as Cement, Power, and Technology were major detractors from the KSE-100 Index, eroding 1,901, 1,437, and 1,287 points, respectively. Additionally, Commercial Banks and Fertilizer sectors collectively eroded 1,788 points, although the Refinery and Insurance sectors partially offset the decline by adding 742 and 132 points, respectively.
In the realm of fund performance, the Alhamra Opportunity Fund Dividend Strategy Plan posted a return of 4.14% against the benchmark's -5.33%. As of September 30, 2026, the fund's net assets stood at Rs. 2,584 million, with a net asset value per unit of Rs. 214.2170. The fund was 92.5% invested in equities and held 6.7% in cash.