KEY POINTS
- KSE-100 closes at 163,304 points, down 502 points or 0.31% WoW
- Early optimism fades as profit-taking dominates mid to late sessions
- Macroeconomic data improves, but foreign inflows remain subdued
- Market likely to hover in the range of 162,000-165,000 points during week ahead
ISLAMABAD: The Pakistan Stock Exchange (PSX) ended lower for the week ended Friday, as intermittent profit-taking erased early gains from a promising start. Pundits foresee a cautiously optimistic market ahead.
During the week under review, the benchmark KSE-100 index closed at 163,304 points, down 502 points or 0.31 per cent week-on-week, according to data from the Pakistan Stock Exchange.
The week began with strong momentum, welcoming easing regional tensions and encouraging macroeconomic indicators.
However, sentiment cooled by mid-week as investors turned cautious amid concerns over external financing, muted foreign inflows, and uncertainty around policy continuity.
Analysts described the movement as “range-bound and selective,” reflecting limited conviction among institutional investors.
Early gains fade after mid-week correction
The week opened on a bullish note, with the KSE-100 rallying by 1.49 per cent on Monday to close at 166,243 points.
The upward trend continued on Tuesday as the index gained another 1,103 points to finish at 167,346, buoyed by renewed investor confidence following a ceasefire agreement between Pakistan and Afghanistan, according to JS Global.
Mid-week, however, the tone shifted. The market turned volatile on Wednesday, oscillating between gains and losses before closing at 166,553, down 794 points, as traders opted for profit-taking.
On Thursday, the index shed another 1,962 points to settle at 164,590, pressured by foreign selling and global market softness.
The week ended on a weak note as the KSE-100 fell further to 163,304 on Friday, losing 1,286 points to close at the week’s low.
Macroeconomic backdrop and sectoral performance
Brokerage house Arif Habib Limited (AHL)mentioned in its weekly report that the market largely remained range-bound throughout the week.
It attributed the early gains to a positive current account balance and stable macro trends but highlighted that momentum fizzled out as the week progressed.
According to AHL, Pakistan posted a current account surplus of $110 million in September 2025 compared with a deficit of $52 million in September 2024.
Likewise, the Real Effective Exchange Rate (REER) rose to 101.73 from 100.09 in August, indicating a 1.64 per cent month-on-month increase.
Foreign Direct Investment (FDI) increased to $186 million in September from $175 million a month earlier.
Oil and gas production declined slightly during the week, while power generation in September increased 0.8 per cent year-on-year to 12,592 gigawatt hours (GWh).
However, generation costs dropped 15 per cent on lower oil prices as Brent crude slipped 7.1 per cent year-on-year, AHL added.
Wadee Zaman of JS Global observed that while the index touched an intra-week high of 168,414 points after the early rally, the gains proved short-lived as traders booked profits amid lingering policy uncertainty.
Policy outlook and external pressures
The International Monetary Fund (IMF), in a recent advisory quoted by Reuters, warned that the economic impact of recent floods may weigh on Pakistan’s near-term growth, inflation, and current account outlook.
This advisory, coupled with global market volatility, dampened sentiment in the latter half of the week.
Meanwhile, the federal government’s plan to roll out a three-year power tariff relief package for industrial and agricultural consumers drew mixed market reactions.
Arab News reported that while the initiative could improve competitiveness in the medium term, investors remain cautious over its fiscal implications.
IT exports provided a bright spot, rising 25 per cent year-on-year to $366 million in September, and bringing total exports for the first quarter of FY26 to $1.1 billion, up 21 per cent year-on-year. SBP’s foreign exchange reserves rose modestly by 14 million dollars to 14.55 billion dollars, according to data cited by Bloomberg.
Outlook
Market analysts expect the PSX to remain in a narrow band between 162,000 and 165,000 points in the coming week.
Business Recorder reported that investors are closely monitoring developments regarding the IMF’s final decision on the next tranche of the Extended Fund Facility, external funding commitments, and rupee stability—all key factors for the market’s future direction.
Bloomberg noted that any confirmation of loan disbursements or an improvement in foreign portfolio flows could lift sentiment for a shorter term; however, further delays or weak macro data might extend the consolidation phase.
In sum, the PSX remains cautious but not directionless. Selective activity is likely to persist, with blue-chip sectors—banks, energy, and technology-expected to stay in the limelight as investors await clarity on the external account and fiscal policy trajectory.
