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Pakistan Stock Exchange rebounds 0.47% on auto policy and Iran diplomacy hopes
The Pakistan Stock Exchange rebounded on Wednesday, with the KSE-100 index rising 0.47 per cent to 165,930.99, driven by renewed institutional buying and optimism around the draft Auto Policy 2026-31 and hopes for US-Iran diplomatic de-escalation. Trading volumes remained subdued at 379.9 million shares, with gains concentrated in banking, power, and auto sectors.
Quick Facts
- KSE-100 index gained 779.34 points (0.47 per cent)
- Partial recovery after two consecutive losing sessions
- Draft Auto Policy 2026-31 approved
- Renewed institutional buying
- Selective buying at lower levels
The Pakistan Stock Exchange (PSX) posted a partial recovery on Wednesday, with the KSE-100 index gaining 779.34 points to close at 165,930.99, a 0.47 per cent increase. The rebound followed two consecutive sessions of losses and was driven by renewed institutional buying amid optimism about the draft Auto Policy 2026-31 and expectations of progress in US-Iran diplomatic efforts to ease geopolitical tensions.
Key contributors to the index's gains included United Bank, Hub Power, Habib Bank, Oil and Gas Development Company, and Mari Energies, which collectively added approximately 493 points. The commercial banks, power generation, and cement sectors all contributed positively, though weakness in Attock Refinery, Fatima Fertiliser, Engro Holdings, Fauji Cement, and Millat Tractors partially offset the advances. Activity remained concentrated in the refinery, investment, technology, and communication sectors, with selective buying emerging at lower levels following the recent selling pressure.
The draft Auto Policy 2026-31, approved by the Prime Minister's office, proposed a five-year roadmap to boost automotive exports to $6 billion through tariff rationalisation, localisation, and electric vehicle incentives, including preferential sales tax rates for new energy vehicles. The policy also envisaged export-linked incentives and stricter safety standards, pending requisite approvals including clearance from the International Monetary Fund.
Trading volumes remained subdued, with activity falling 14.98 per cent to 379.9 million shares from the prior session, though the value of traded shares rose 9.54 per cent to Rs21.2 billion. Market capitalisation increased to Rs18.384 trillion. Of the 497 companies that traded, 225 posted gains, 230 suffered losses, and 42 remained unchanged. Analysts noted that institutional buying, optimism about US-Iran diplomacy, and renewed interest in auto stocks may sustain positive momentum, though geopolitical uncertainty and macroeconomic risks—including elevated crude oil prices at $110 per barrel—could keep volatility elevated.
Why This Matters
The KSE-100's rebound signals renewed institutional confidence in Pakistan's equities after two consecutive losing sessions. The draft Auto Policy 2026-31—targeting $6 billion annual automotive exports through tariff cuts, localization, and EV incentives—directly affects automotive manufacturers, component suppliers, and related supply chains pending IMF clearance. US-Iran diplomatic de-escalation hopes reduce regional crude oil price volatility (currently at $110/barrel), lowering input costs for energy-dependent industries. Subdued trading volume (down 14.98% to 379.9 million shares) and geopolitical uncertainty suggest caution: market momentum depends on policy approval timelines and external commodity/geopolitical shifts.
Timeline & Sources
Oct 21, 2026
WireTwo consecutive sessions of losses on PSX prior to rebound
Oct 22, 2026
WireKSE-100 index up 694 points by 9:33 am, reaching 165,845.69
Oct 22, 2026
WireIntra-day high of 166,242.43 reached
Oct 22, 2026
WireIntra-day low of 164,731.91 reached
Oct 22, 2026
WireMarket close: KSE-100 gains 779.34 points (0.47 per cent) to 165,930.99