Stocks make late recovery after seven-day slump

The Pakistan Stock Exchange (PSX) staged a powerful recovery at the end of the outgoing week, with the benchmark KSE-100 index surging 4,899 points, or 3.13%, on Friday to close at 161,632, marking one of its strongest single-day rebounds in recent sessions. On a week-on-week (WoW) basis, the index registered a decline of 1,672 points.

On a day-on-day basis, the PSX opened the rollover week on a bearish note, with the KSE-100 extending its losing streak by shedding another 1,140 points (-0.70%) to close at 162,164. On Tuesday, the market witnessed yet another turbulent session as the index fell for the fifth consecutive day, shedding 2,063 points (-1.27%) to settle at 160,101 – barely holding above the psychological support of 160k.

The bearish spell persisted for the sixth straight session on Wednesday when the KSE-100 slipped below 160k to close at 158,465, down 1,636 points (-1.02%). The bearish streak continued unabated on Thursday as the bourse lost 1,732 points (-1.09%) to close at 156,733. The benchmark index marked a new low, breaching the previous trough of 158,443 (recorded on October 13, 2025), amid persistent selling and fading confidence.

However, on Friday, after days of relentless pressure, bulls staged a powerful comeback in the last session of the week and month, propelling the KSE-100 to reclaim the 160k mark. Arif Habib Limited (AHL), in its weekly report, said that the KSE-100 index remained on a downward trajectory at the start of the week, but bounced back decisively on Friday, recovering some lost ground. The bearish part of the week was on the back of disappointing results across several sectors. Consequently, the index closed the week at 161,632, marking a decline of 1,672 points.

In the T-bill auction, AHL mentioned, the government raised a total of Rs1,134.5 billion against the target of Rs950 billion. Participation remained strong at Rs2,132.4 billion. Yields were down across the tenors of one month and three months by 11 basis points and 0.1 basis point respectively, while yields for six-month and 12-month tenors surged by 0.4 basis point and 10 basis points.

Broad money (M2) stood at Rs39.8 trillion, exhibiting a surge of 0.5% WoW, as of October 17, 2025. On Monday, the monetary policy committee maintained the policy rate at 11% in line with expectations.

The State Bank of Pakistan (SBP) announced details of its foreign exchange interventions. Between Jun'24 and Jul'25, the SBP conducted net foreign exchange interventions of $8.4 billion. In Jul'25, the SBP reported net foreign exchange interventions of $189 million, AHL said.

Banking deposits increased by 12.3% year-on-year (YoY) to Rs35.2 trillion as of Sept'25 (Sept'24: Rs31.3 trillion), while advances rose by 9.4% YoY to Rs13.5 trillion during the same period (Sept'24: Rs12.3 trillion).

Oil production recorded an increase of 9.9% WoW, arriving at 66,834 barrels per day. Production from Dhok Sultan, Nashpa and Mardan Khel rose during the week, AHL added.

Wadee Zaman of JS Global noted that the KSE-100 index remained under pressure during the week, falling to the low of 156,732 amid geopolitical tensions following the failure of Pakistan-Afghanistan talks in Istanbul on cross-border militancy. However, the index saw a sharp rebound on Friday after both countries agreed to maintain the ceasefire, with further discussions scheduled for November 6. On the economic front, the SBP kept the policy rate unchanged at 11%, citing a medium-term inflation target of 5-7%. The IMF is expected to hold its board meeting in December to approve the next $1.2 billion tranche, he said.

The World Bank revised its GDP growth projection to 3% (from 3.4%), citing inflationary risks due to floods. In external developments, Saudi Arabia pledged to extend a $1 billion oil financing facility and roll over $5 billion in deposits to support Pakistan's external position. The Pakistani rupee strengthened to a six-month high, closing at Rs280.91/USD on Friday. On the fiscal side, the government posted a rare federal surplus of Rs1.5 trillion in 1QFY26 versus a Rs649 billion deficit in 1QFY25, Zaman added.