Pakistan Stock Exchange (PSX) edged lower on a week-on-week basis despite closing the last three sessions on a positive note, with the benchmark KSE-100 Index losing 810.15 points (-1.27 percent) to close at 63,002.91 points. Growing concerns on the political front, a lack of positive triggers and uncertainty about the fate of circular debt and state-owned enterprises (SOEs) impacted investor sentiment during the first half of the week under review. However, robust earnings of the companies and export data provided some support to the market and the indices eroded a major portion of losses incurred during the first two sessions of the week. The market opened on a negative note on Monday and remained in the red throughout the session on account of uncertainty over monetary policy as well as energy circular debt and geopolitical tensions. The KSE-100 Index shed 1,039.34 points (-1.63 percent) during the session. Political uncertainty and foreign selling continued to weigh on the market on Tuesday and the KSE-100 Index lost another 931.98 points (-1.48 percent) to close at 61,841.74 points. The market managed to make gains in the last three sessions of the week amid ease in foreign selling, but volumes remained low in all these sessions. The benchmark index gained 137.44 points (+0.22 percent) on Wednesday, 414.55 points (+0.67 percent) on Thursday and 609.18 points (+0.98 percent) on Friday to close the week at 63,002.91 points. A positive shift occurred in the market, propelled by the majority of companies reporting a substantial surge in profits. On the macroeconomic front, the Consumer Price Index (CPI) inflation stood at 28.3 percent year-on-year for January 2024, with a month-on-month uptick of 2.9 percent in food inflation. The State Bank of Pakistan’s decision to keep the Policy Rate unchanged at 22 percent aligned with market expectations, with hints of potential disinflation and softening interest rates going forward. The country’s primary balance for 1HFY24 exceeded the IMF’s proposed performance criteria of Rs1.42 trillion. Arif Habib Limited (AHL) reported that the market remained depressed during the week due to political noise and uncertainty related to circular debt resolution. The SBP’s decision to keep the benchmark policy rate unchanged and a decline in headline inflation for January 2024 contributed to market dynamics. According to a note by AKD Research, average trading volumes remained down by 24.7 percent week-on-week, clocking in at 312.8 million shares, compared to 415.8 million shares traded in the past week. The market was mainly influenced by news events in the energy sector, such as the hike in fuel prices and the conflict in the Middle East. The country’s foreign exchange reserves declined by $55 million to $8.22 billion, as Pakistan requested China for a $2 billion debt rollover to ease its external financing pressures. The International Monetary Fund (IMF) also lowered its GDP growth projection for Pakistan to 2% for the current fiscal year, citing the challenges of inflation and fiscal consolidation. The Karachi interbank offered rate (Kibor) increased to 22%, reflecting the tight liquidity conditions in the banking system. The major net sellers in the market were foreigners, who offloaded $9.7 million worth of shares, while the major net buyers were insurance companies, who purchased $7.0 million worth of shares.