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Banks led a 5,700-point rally.
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E&P stocks saw profit-taking (OGDC, PPL, MARI).
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Fertilizers showed muted earnings excitement.
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Mutual funds turned net sellers after record 2025 buying.
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Liquidity rotated, not evaporated.
Look at the heatmaps.
The rally was “by the banks, of the banks, for the banks.”
When UBL moves, then MEBL, then HBL — index mechanics amplify points. When OGDC and PPL correct, the same math works in reverse.
That is not collapse.
That is rotation.
The Real Shift: From Rerating to Earnings
The rally from 40k levels was largely a P/E rerating cycle.
The economy stabilized.
External account pressure eased.
Policy rates peaked.
Liquidity surged.
Multiples expanded.
Now the easy money is done.
From here onward:
• Returns will depend on earnings delivery.
• Spread compression matters (see Meezan Bank).
• Sector selection replaces index momentum.
This is the natural second phase of a bull cycle.
New investors expecting 2024-style explosive gains will be disappointed.
Disciplined investors will adapt.
