Selling returns to PSX, benchmark index ends week on a negative note

After days of buying momentum, selling returned at the Pakistan Stock Exchange (PSX) amid concerns around the opening of the Strait of Hormuz, with the benchmark KSE-100 Index shedding over 300 points on Friday.

The market opened on a weak note, with the index slipping sharply to an intraday low of 180,620.08, indicating early selling pressure. However, buying interest emerged soon after, allowing the benchmark to recover and briefly move into positive territory, touching an intraday high of 181,647.27.

The market traded in a relatively narrow range through midday before another bout of selling around the final hours of trading pushed the index close to the intraday low of 180,620.08.

The benchmark then staged a late-session recovery, trimming most of its losses, but ultimately failed to erase the negative territory.

At close, the benchmark index settled at 181,430.02, down by 346.57 points or 0.19%.

In a historic development, Pakistan, Saudi Arabia and Türkiye have signed the Makkah Joint Defence Agreement, committing to strengthen collective security and treat an armed attack against any one of the three countries as an attack against all.

On Thursday, PSX extended its recovery as easing geopolitical tensions, lower oil price volatility and renewed institutional buying boosted investor confidence. The benchmark KSE-100 Index gained 1,761.66 points, or 0.98%, to settle at 181,776.60 points.

Globally, Asian shares held their breath on Friday for US jobs ​data that could prove pivotal for next month’s interest-rate decision by the Federal Reserve, while rising oil prices ‌served as a reminder that Middle East tensions remain far from resolved.

MSCI’s broadest index of Asia-Pacific shares outside Japan held flat and was down 0.4% for the week. Japan’s Nikkei dropped 0.9% although it was set for a weekly rise of 1.2%.

South Korea’s KOSPI slipped 0.5% and was down 5.0% for the week ​for a seventh straight week of declines. The index had doubled in the first half of the year, swept up ​by the blistering demand for AI-linked chip stocks. China’s CSI 300 rose 0.2%.

After bouts of volatility sparked ⁠by concerns over the durability of the AI-driven rally, investors are now squarely focused on the U.S. payrolls report due later in ​the day, which could prove crucial for the interest-rate outlook. Forecasts are centred on a rise of 80,000 jobs for July after a 57,000 ​gain in June, with the unemployment rate forecast to hold steady at 4.2%.

The stakes are high as markets cannot seem to make up their mind about how the Federal Reserve might move next month, with a rate hike seen as a coin toss.