The Pakistan Stock Exchange ended a largely range-bound week on a positive note, with the KSE-100 index settling at 177,697 points. The benchmark gained 530 points, or 0.3%, compared with the previous week.

Trading remained cautious as investors monitored efforts to ease the US-Iran standoff and restore shipping through the Strait of Hormuz. A public holiday on Wednesday also reduced market activity.

The index opened the week with a 200-point decline on Monday, closing at 176,967. It recovered 404 points on Tuesday to reach 177,371. After the midweek holiday, the market remained almost flat on Thursday, slipping 48 points to 177,323.

On Friday, the benchmark gained another 374 points, or 0.21%, to finish at 177,697.

Arif Habib Limited said the market remained range-bound as investors assessed geopolitical developments and the possibility of a gradual resolution to the US-Iran conflict.

Moody’s upgrade and IMF review draw attention

Meanwhile, investors focused on several major economic developments. Moody’s upgraded Pakistan’s sovereign credit rating to B3 from Caa1 and maintained a stable outlook.

The IMF is also expected to send its fourth Extended Fund Facility review mission to Pakistan in September. The mission will assess progress on structural reforms, including legislation related to the Sovereign Wealth Fund, state-owned enterprise governance and anti-corruption measures.

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The developments could influence investor confidence in the coming weeks.

Furthermore, the State Bank of Pakistan reported a 20% year-on-year decline in net profit during FY26. Its profit fell to Rs1.99 trillion from Rs2.499 trillion in FY25. The central bank transferred a surplus of Rs1.932 trillion to the federal government.

Fuel prices rise as refinery investment grows

Pakistan’s petroleum sector also remained in focus. Under the new daily pricing mechanism, petrol prices increased by Rs4.82 to Rs342.60 per litre. High-speed diesel rose Rs6.91 to Rs371.61 per litre.

The petroleum levy, inland freight equalisation margin and oil marketing company margins remained unchanged.

At the same time, the country’s five major refineries are expected to sign agreements under the Brownfield Refinery Upgradation Policy early next month. The initiative could unlock around $6 billion in investment.

The planned upgrades aim to support domestic production of Euro 5-compliant fuels and reduce Pakistan’s reliance on imported petrol and diesel.

Reserves remain stable as investors await earnings

Pakistan’s liquid foreign exchange reserves increased to $22.6 billion as of August 27. The total rose by $81.3 million week-on-week.

The State Bank’s reserves stood at $17.1 billion, while commercial banks held around $5.5 billion. The figures provide import cover of approximately 2.56 months.

The rupee also strengthened slightly. It appreciated 0.02% and closed at Rs277.50 against the US dollar, compared with Rs277.56 previously.

JS Global’s Wadee Zaman said the market moved in a seesaw pattern during the week. He noted that the prolonged uncertainty surrounding the Strait of Hormuz affected investor sentiment. Brent crude prices consequently fell 5% during the week to $89.7 per barrel.

Domestically, the government also moved ahead with reforms in the power and gas sectors. The Cabinet Committee on Privatisation approved a restructuring plan for three distribution companies as part of efforts to address state-owned enterprise reforms.

The Petroleum Division is also reviewing the gas tariff structure. Officials plan to replace the existing 12-slab system with a single rate while directing targeted subsidies towards households according to income.

Looking ahead, analysts expect geopolitical developments to remain a major driver for the market. However, the ongoing corporate earnings season could provide support if companies continue to report solid results.