KARACHI: The Pakistan Stock Exchange (PSX) navigated a highly volatile trading week marked by geopolitical uncertainty, rising domestic yields, external trade challenges and mixed sectoral performance, with the benchmark KSE-100 Index ultimately ending the week almost unchanged, reflecting a balance between emerging risks and pockets of resilience across select sectors.
The KSE-100 Index closed at 184,129.58 points, down marginally by 44.90 points week-on-week from the previous close of 184,174.48 points, indicating a largely flat weekly performance despite sharp intra-week swings.
In terms of broader market indicators, the BRIndex100 recorded a strong weekly performance, closing the week at 21,031.68 points.
Total turnover on the BRIndex100 stood at 3.43 billion shares. Meanwhile, the BRIndex30 also posted notable gains, closing at 79,242.34 points, with a total traded volume amounted to 2.58 billion shares.
Market sentiment remained fragile throughout the week as investors reacted to external geopolitical developments, domestic security concerns and evolving macroeconomic indicators.
Selling pressure intensified during several sessions amid escalating tensions between the United States and Iran, which raised fears of broader regional instability and potential disruptions to energy markets.
The domestic security situation also contributed to cautious positioning, particularly among institutional investors, limiting fresh inflows into equities.
On the macroeconomic front, inflation dynamics remained supportive. Consumer Price Index (CPI) inflation for January 2026 was recorded at 5.8 percent, keeping the real policy rate positive at around 4.7 percent.
Cumulatively, average inflation for 7MFY26 stood at 5.24 percent, reinforcing perceptions of relative price stability and maintaining expectations of a gradual easing bias over the medium term, even as near-term policy remained tight.
External trade data presented a mixed picture. Pakistan’s trade deficit narrowed to US$2.7 billion in January 2026, reflecting a 6.6 percent year-on-year decline, supported by a 3.7 percent YoY increase in exports alongside a 1.4 percent YoY contraction in imports.
However, on a cumulative basis, the trade deficit for 7MFY26 widened significantly to US$22 billion, marking a 28.2 percent YoY increase, highlighting persistent structural weaknesses in the external account despite monthly improvements.
On the external financing front, Pakistan received short-term relief as the United Arab Emirates rolled over a USD2 billion loan for one month at a financing rate of 6.5 percent, easing immediate pressure on foreign exchange liquidity.
In parallel, Pakistan requested Saudi Arabia to extend its US$1.2 billion oil financing facility for an additional two years, underscoring ongoing reliance on bilateral partners to manage external funding requirements.
Another notable development during the week was Pakistan’s loss of comparative advantage versus India following US negotiations that reduced Indian tariffs from 50 percent to 18 percent, a shift expected to intensify competitive pressures on Pakistan’s textile exports in key global markets.
In the domestic fixed-income market, liquidity conditions tightened as the government raised Rs823 billion in the latest Treasury-bill auction, exceeding the target of Rs650 billion.
Cut-off yields rose by up to 39 basis points across various tenors, signalling higher short-term borrowing costs and reinforcing the cautious tone prevailing in equity markets.
Despite volatility, PSX market capitalization edged up 0.3 percent week-on-week to Rs20.88 trillion, while market capitalization in dollar terms also increased 0.3 percent to USD74.66 billion, reflecting currency stability and selective accumulation in certain sectors.
Trading activity in the cash market showed divergent trends. Average daily traded volume on the Ready Board rose 17.6 percent WoW to 1.01 billion shares, suggesting increased participation at lower price levels. However, average daily traded value declined 11.0 percent to Rs49.17 billion, equivalent to US$175.79 million, down from USD197.55 million a week earlier.
Sector-wise performance remained mixed, reflecting selective investor preferences. Power stocks significantly outperformed, gaining 7.1 percent, driven by strong volume participation.
Banks followed with a 2.0 percent gain, supported by expectations of balance sheet stability. Other gainers included Autos (1.8 percent), Technology and Communication (1.4 percent), Textile Composite (1.2 percent) and Pharmaceuticals (0.4 percent).
On the downside, pressure persisted in several cyclical and commodity-linked sectors. Chemical stocks declined 3.8 percent, engineering fell 2.9 percent, exploration and production lost 2.1 percent, and cement slipped 1.7 percent.
Meanwhile, refinery and oil & gas marketing companies each declined 1.0 percent, food dropped 0.8 percent, and fertilizer eased 0.7 percent, reflecting earnings concerns and cost pressures.
By traded volume, the power sector dominated activity, accounting for 36 percent of total market turnover, underscoring strong investor interest. This was followed by investment banks (13 percent), banks (9 percent), technology and communication (7 percent) and oil and gas marketing companies (4 percent), while all other sectors collectively contributed 31 percent of overall volume.
On the stock-specific front, K-Electric Limited emerged as the top performer, surging 25.9 percent to close at Rs8.94, supported by heavy volumes. Other notable gainers included ILP (up 10.6 percent), SAZEW (8.7 percent), HMB (6.3 percent), TRG (5.5 percent), GHNI (5.4 percent) and FATIMA (5.0 percent). Conversely, LOTCHEM recorded the steepest decline, plunging 20.8 percent, followed by PIBTL (-6.2 percent), PPL (-5.7 percent), GADT (-5.2 percent), KTML (-5.2 percent), ISL (-4.9 percent) and PSX (-4.2 percent).
Overall, the week underscored the market’s fragile equilibrium, with geopolitical uncertainty, rising yields and external competitiveness challenges weighing on sentiment, while stable inflation, selective sectoral strength and improved trading volumes helped the KSE-100 avoid a deeper correction.
Copyright Business Recorder, 2026