KEY POINTS
- KSE-100 rebounds sharply midweek after early plunge, ends marginally higher
- Investor mood swings between optimism on IMF deal and caution on profit-taking
- Energy, banking and export stocks lead selective buying
- Global and regional markets post mixed performance amid policy uncertainty
- Analysts expect range-bound trading ahead of key economic updates
ISLAMABAD: The Pakistan Stock Exchange (PSX) ended a volatile week on Friday with modest overall gains, as sharp midweek recoveries offset early losses, and investors remained cautious amid global uncertainty and domestic economic headwinds.
According to data from the PSX portal, the benchmark KSE-100 Index opened the week on a weak note on Monday, closing at 158,443 points after heavy selling triggered by geopolitical concerns and risk aversion across regional markets.
First session’s sluggishness was in continuation of the preceding week’s bearish sentiment.
Analysts quoted by Mettis Global said investor sentiment remained fragile amid worries over external-sector pressures and a lack of clarity on the then ongoing talks with the International Monetary Fund (IMF).
On Tuesday, the market rebounded sharply, surging 4.44 per cent to close at 165,476 points, as bargain hunters stepped in following Monday’s steep losses.
Traders were of the view that renewed optimism over Pakistan’s expected staff-level agreement with the IMF and positive movement in the rupee helped lift investor confidence.
Energy and banking stocks led the recovery, supported by improving oil prices and expectations of lower borrowing costs.
The rally extended modestly on Wednesday, with the index adding 0.13 per cent to close at 165,686 points, as investors remained upbeat yet selective.
According to the PSX data summary, activity was concentrated in large-cap stocks, particularly in oil and gas exploration firms, while small- and mid-cap counters lagged.
Profit-taking set in on Thursday, dragging the benchmark down 0.86 per cent to 164,261 points, as investors booked gains ahead of the weekend.
Market analysts quoted by Business Recorder noted that the rally had been “too fast and too narrow,” prompting traders to cash in amid concerns about regional tensions and global oil volatility.
The week ended on a muted note on Friday, when the KSE-100 fell 0.28 per cent to close at 163,806 points, as investors adopted a wait-and-see approach.
Analysts at Arif Habib Limited said that despite the midweek rebound, the market remained vulnerable to headline risks and awaited concrete policy signals before taking new positions.
Regional Activity
Regionally, Asian markets presented a mixed picture, with Japan’s Nikkei and India’s Sensex inching up on easing US bond yields, while Chinese equities fell on concerns about slowing growth.
Global sentiment remained restrained as investors assessed shifting interest rate expectations in major economies and the impact of ongoing geopolitical developments.
Tantatively Constructive Sentiment
In Pakistan, the overall market tone was described by Reuters as “tentatively constructive,” with optimism tied to the government’s ongoing fiscal reforms and expected foreign inflows.
However, thin participation outside large caps indicated that broader conviction was still missing.
Outlook
Analysts expect the Pakistan Stock Exchange (PSX) to trade in a range-bound and cautious manner in the week starting Monday, October 20, as investors await the International Monetary Fund’s Executive Board approval of Pakistan’s recently concluded staff-level agreement, along with key macroeconomic indicators due next week.
According to The Express Tribune, the PSX ended the outgoing week in positive territory, gaining 708 points or 0.43 per cent.
However, momentum remained uneven as participants opted for selective buying in large-cap stocks. “The index is expected to continue with a cautious tone in the coming sessions, as investors await monetary cues and macro clarity before taking fresh positions,” Ali Najib, Deputy Head of Trading at Arif Habib Ltd, told the newspaper.
Analysts attributed the mixed trend to investor hesitation ahead of the IMF Board review and a lack of fresh domestic triggers. Market watchers said corporate earnings from key sectors such as banking, cement, and energy are likely to guide short-term sentiment.
At the same time, sustained gains would depend on clarity regarding external financing flows, inflation readings, and the policy direction of the State Bank of Pakistan.
Overall, analysts foresee consolidation and cautious optimism at the PSX next week, with selective activity expected to continue until the IMF Board’s formal approval provides a clearer outlook for economic stability.
