KARACHI: The Pakistan Stock Exchange (PSX) closed the week ending May 9, 2025, in the red, as mounting geopolitical tensions between Pakistan and India weighed heavily on investor sentiment.
Persistent uncertainty surrounding regional stability prompted widespread caution, dragging market performance down throughout the trading week except Friday, in which the market showed strong recovery.
The benchmark KSE-100 Index shed 6,939 points, or 6.1 percent, on a week-on-week basis, closing at 107,175 points compared to 114,114 points in the previous week. Average trading volumes rose by 20 percent week-on-week, reaching 508 million shares from 424 million shares.
Meanwhile, the average daily traded value on the ready counter stable at Rs 27.6 billion. Total market capitalization also declined by Rs 915 billion, settling at Rs 12.893 trillion versus Rs 13.808 trillion a week earlier.
BRIndex100 also lost 877 points during the last week to close at 11,268 points compared to 12,145 points a week earlier. Average daily turnover at BRIndex100 was 439 million shares. BRIndex30 also declined by 3,105 points on a week-on-week basis to settle at 32,236 points with average daily trading volumes of 303 million shares.
Analysts at AHL said that the market participants are actively monitoring geopolitical situation, with de-escalation in tension to revive the positive sentiment. Moreover, disbursement from IMF post executive board meeting is expected in the upcoming week, which is expected to lift up the sentiment, they added.
According to JS Global, KSE-100 Index dropped 6.1 percent WoW mainly due to negative sentiments prevalent during the week owing to geopolitical tensions between Pakistan and India. Average daily trading volumes increased by 20 percent WoW.
The week began on a volatile note as markets in Pakistan reacted to heightened geopolitical concerns. By Thursday, sentiment had weakened sharply following reports of Indian drone strikes on multiple cities including Karachi and Lahore, after Pak forces downed their planes.
KSE-100 experienced its second-largest intraday decline on Thursday, plunging 7.6 percent and triggering a trading halt. Tensions briefly escalated before Pakistan forces responded by eventually shooting down 77 Indian drones.
With fears of further escalation easing by the end of the week, sentiment in the stock market improved. The market staged a strong comeback on Friday, with the benchmark index rising 3,648 points to close at 107,174.
On the economic front, SBP reduced the Policy Rate this week by 100bp to 11 percent mainly influenced by declining inflation. This marks the seventh rate cut in the ongoing monetary easing cycle bringing cumulative reduction to 1,100bps from its peak of 22 percent. As per SBP data, remittances recorded an inflow of $3.2bn during Apr-2025, up 13 percent YoY. SBP forex reserves rose $118mn to reach $10.3bn.
Analysts at Topline Securities said that the KSE 100 Index declined on WoW basis, this decline was largely on account of escalation of tension between India and Pakistan, where during the week cross border hostilities kept the investors on the edge.
During the week individuals and Mutual Funds (on redemption) largely sold in the market this selling was largely absorbed by local institutions - banks, companies, other organizations and insurance sector.
Other developments during the week were fixed bond PIB auction in which government raised Rs299bn (Competitive & Non-Competitive) against target of Rs350 billion whereas cut-off yields down by 15-20bps, Foreign reserves held by SBP increased by $118 million to $10.33 billion for the week ending May 02, 2025 and remittance number for the month of March came in today at $3.2 billion (up 13 percent YoY).
Copyright Business Recorder, 2025
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