KARACHI: Foreign investors staged a return to Pakistan’s equity market in July, ending nearly two years of persistent selling by recording their first month of net inflows since 2024, even as the benchmark index closed lower amid geopolitical uncertainty.
According to data compiled by the National Clearing Company of Pakistan Limited (NCCPL), overseas investors emerged as net buyers of $34.4 million worth of shares during July 2026 after purchasing equities valued at $322.3 million and selling $287.9 million. The inflows marked the first instance of net foreign buying in 23 months and came in the opening month of fiscal year 2026-27.
AKD Securities Director Research Muhammad Awais Ashraf said the reversal follows 22 consecutive months of foreign net selling, during which monthly outflows ranged between $12 million and $279 million.
The banking sector accounted for the largest share of foreign interest, attracting net inflows of $13.8 million, while oil and gas exploration and production (E&P) companies drew $6.7 million, according to AKD Securities.
Figures released by AHL Research showed foreign investors also invested a net $1.7 million in fertiliser companies and $1.2 million in oil marketing companies (OMCs), while “other sectors” collectively received $17.7 million in net inflows.
In contrast, overseas investors reduced exposure to technology stocks with net sales of $3.6 million, followed by the power sector at $2.7 million. Cement and textile companies each registered net foreign outflows of $0.2 million.
Despite the improvement in foreign participation, the Pakistan Stock Exchange remained under pressure during the month. AHL Research said the KSE-100 Index fell 4,208 points, or 2.3%, to settle at 176,094 points, as geopolitical tensions continued to dampen investor sentiment.
Among the index constituents, banks, refinery, synthetic and tobacco stocks provided positive support, while losses in E&P, cement, fertiliser and technology shares outweighed gains. Auto assemblers, textile manufacturers and auto parts companies delivered largely muted performance over the month.
Trading activity was mixed in July. Average daily volumes rose 1% month-on-month to 845.1 million shares, while the average daily traded value declined 5% in US dollar terms to $134.9 million.
