KARACHI: The Pakistan Stock Exchange (PSX) continued its downward trajectory for the third consecutive week, as foreign corporates and mutual funds opted for profit-taking in a bearish market environment. Persistent macroeconomic pressures — including rising inflation, a widening trade deficit, and sluggish domestic demand — weighed heavily on investor confidence.
Despite the overall decline, the market saw a slight recovery on Friday, supported by higher-than-expected remittance inflows and a stronger-than-anticipated fiscal surplus for the first quarter of FY26. The benchmark KSE-100 index shed 2,039 points, or 1.26 percent, closing the week at 159,593 after touching a high of 163,935 and a low of 158,253.
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The Consumer Price Index (CPI) for October surged 6.2 percent year-on-year — the highest since October 2024 — dampening sentiment as investors anticipated higher costs to impact both consumer spending and corporate earnings. Similarly, Pakistan’s trade deficit widened by 56 percent year-on-year to $3.2 billion in October, though it improved marginally compared to September. Exports rose 14 percent month-on-month but remained 4.5 percent below last year’s figures.
Remittance inflows, however, provided some relief, jumping 12 percent year-on-year to $3.42 billion in October. The rupee also showed slight stability, appreciating 0.03 percent to close at Rs280.8 against the US dollar. Sector-wise, cement dispatches rose 7.3 percent year-on-year due to robust local demand, while fertiliser sales declined sharply — DAP by 55 percent and urea by 2 percent. Oil marketing companies posted a modest 2 percent rise in sales, mainly driven by increased diesel demand during the Rabi sowing season.
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Looking ahead, analysts expect the PSX to remain cautious, with investor sentiment hinging on progress in talks with the International Monetary Fund (IMF) and upcoming constitutional amendments. Market experts note that the KSE-100 index’s current price-to-earnings ratio of 8.07x and an attractive dividend yield of 6 percent could offer long-term investment opportunities if economic stability improves.