PSX extends losing streak on regional tensions

Profit-taking amid geopolitical tussle triggers 3.5% weekly loss

KARACHI:

The KSE-100 index extended its losing streak at the Pakistan Stock Exchange (PSX) in the outgoing week, declining 3.5%, or 6,439 points, on a week-on-week basis to close at 175,803. The market witnessed heightened volatility as escalating regional tensions initially triggered broad-based selling, with the benchmark index plunging 6,408 points on Tuesday.

On a day-on-day basis, the PSX commenced the trading week with a negative session. The KSE-100 dropped 2,315 points (-1.27%) to close at 179,927. The market faced continued broad-based selling on Tuesday, plunging 6,408 points (-3.56%) and settling at 173,519.

However, on Wednesday, the bourse staged a modest rebound, where the index gained 1,767 points (+1.02%) to 175,286. Thursday saw another strong session, which extended gains by 2,838 points (+1.62%) and closed at 178,124. Yet, the PSX ended the week with a profit-taking session, with the index losing 2,321 points (-1.30%) to 175,803.

Arif Habib Limited (AHL) noted that the KSE-100 closed at 175,803, down 3.5% WoW (-6,439 points). The index fell sharply in early trading, shedding 2,315 points on Monday and a further 6,408 points on Tuesday amid heightened geopolitical uncertainty.

Sentiment recovered mid-week after President Trump withdrew his proposed 20% transit fee on the Strait of Hormuz, though renewed geopolitical tensions later in the week reversed those gains.

Gas production in Pakistan decreased 1.3% WoW to 3,058 million cubic feet per day (mmcfd) in the first week of Jul'26, mainly due to lower output from Mari and Shewa fields. Shewa production again dipped sharply to 15 mmcfd from 59 mmcfd, impacted by disruptions linked to the SNGPL pipeline rupture. Oil production, however, improved by 2% WoW to 71,579 barrels per day, AHL mentioned.

Auto sales, including cars, light commercial vehicles, vans and jeeps, rose 30% month-on-month to 22.7k units in Jun'26 (+4% year-on-year), while the cumulative sales for FY26 went up by 33% to 206k units. Large-scale manufacturing (LSM) output fell by 1% YoY in May'26 but rose 1.2% MoM. For 11MFY26, the LSM index jumped 5.8%.

Auto financing increased by 38% YoY to Rs382 billion in Jun'26, up from Rs277 billion in Jun'25. On a MoM basis, it edged higher by 3.4%. Pakistan's trade deficit widened to $4.7 billion (+62.4% YoY) in Jun'26, as exports fell 9.1% to $2.3 billion while imports rose 29.4% to $6.9 billion. The cumulative deficit for FY26 was up 22% to $39.6 billion.

Technology exports hit an all-time high in FY26, rising 21% to $4.6 billion and contributing 46% to overall services exports. The total liquid foreign exchange reserves of the country were recorded at $23 billion, down by $1.313 billion. Out of these, the State Bank's reserves amounted to $17.23 billion, down by $1.245 billion, AHL added.

Syed Danyal Hussain of JS Global wrote that the KSE-100 index extended its losing streak during the week, falling 3.5% (6,439 points) WoW as escalating regional tensions weighed on investor sentiment while pushing Brent crude prices to a one-month high of $85 per barrel. On the macroeconomic front, Pakistan posted a current account deficit (CAD) of $649 million in Jun'26, which brought the cumulative FY26 CAD to $139 million, largely driven by a sharp 22% YoY increase in imports in Jun'26, widening the monthly trade deficit.

Furthermore, the LSM output contracted 0.98% YoY in May'26, though the cumulative 11MFY26 growth remained robust at 5.77%. On the fiscal side, the government retired a record Rs2.9 trillion in domestic debt ahead of maturity during FY26 and was reportedly seeking a $6.7 billion long-term oil financing facility from Saudi Arabia for 15 years at a concessionary rate of 1% for energy security. In the power sector, the end-June circular debt target of Rs1.614 trillion was missed, with the stock reaching Rs1.835 trillion, Hussain said.