KSE-100 ends week down 0.6% despite IMF staff-level agreement

The Pakistan Stock Exchange closed the week lower, with the benchmark KSE-100 Index falling 1,066 points, or 0.6 percent, week-on-week to 167,089 points. Market capitalisation slipped by Rs 156 billion to Rs 18,569 billion, from Rs 18,725 billion a week earlier, according to PSX data. The index touched a high of 169,487 points during the period. For Pakistan, the retreat underscores how quickly the sentiment boost from an IMF staff-level agreement has faded against external pressures.

Financial analyst Arsalan Ahmed told Daily Times that the IMF staff-level agreement, while positive, had already been priced in, and that profit-taking followed the index's earlier run to historic highs. He attributed subdued activity mainly to foreign selling, with average volumes falling 18.6 percent week-on-week to 427 million shares from 525 million shares, and average value easing 2 percent to $6.70 million.

Ahmed said foreign selling had stifled average volumes by nearly 70 percent, noting that the average volume of the KSE-100 Index was 1.3 billion shares before the US-Iran War and had since dampened to 427 million shares. He said Middle East tensions, which pushed up international oil prices, and a spike in US Treasury yields had curbed risk appetite globally, weighing on emerging markets including Pakistan.

Ahmed also pointed to expectations that the State Bank of Pakistan may increase the interest rate at the upcoming Monetary Policy Committee meeting, citing rising inflation and external account pressures. He said that prospect has triggered selling, particularly in leveraged sectors such as cement, steel and technology, and that the market is likely to remain range-bound in the coming week. Attention will now shift to the SBP's monetary policy decision, corporate earnings season and any further movement on IMF board approval for disbursement.

Despite the weekly loss, analysts maintain that the long-term outlook for the PSX remains positive, citing economic stabilisation, expected IMF inflows and improving corporate profitability.