PSX Ends Week Lower as Economic Data Paints a Mixed Picture
The Pakistan stock Exchange (PSX) experienced weekly losses, with the benchmark KSE-100 index declining by 2,039 points, or 1.26 percent. The index commenced the week at 162,827, peaked at 163,935, and reached a low of 158,253 before concluding at 159,593.
The week’s performance was set against a backdrop of fluctuating macroeconomic indicators. October’s Consumer Price Index (CPI) registered a year-on-year increase of 6.2 percent – the highest as October 2024, rising from 5.6 percent in September. This surge in inflation negatively impacted investor sentiment, as concerns grew regarding its potential effect on corporate profitability and consumer spending.
Pakistan’s trade deficit also widened in October, reaching $3.2 billion, a 56 percent year-on-year increase. While showing a slight month-on-month improvement with a 4 percent decrease from September, exports remained 4.5 percent lower compared to the same period last year, despite a 14 percent month-on-month increase.
Though, positive developments offered some counterbalance.Remittances from overseas Pakistanis surged 12 percent year-on-year to $3.42 billion in October. The Pakistani rupee also saw a marginal appreciation, gaining 0.03 percent to close at Rs280.8 against the US dollar.
Sector-specific Performance
Despite the overall challenging economic climate, certain sectors demonstrated resilience. Cement dispatches experienced a notable year-on-year increase of 7.3 percent in October,fueled by robust domestic demand. Conversely, fertilizer sales contracted significantly, with urea sales declining by 2 percent and DAP sales plummeting by 55 percent compared to the previous year, indicating continued weakness in the agricultural sector.
Oil marketing companies (OMCs) recorded a modest 2 percent increase in overall sales, driven by a 4 percent rise in high-speed diesel (HSD) demand linked to the ongoing Rabi sowing season. the PSX’s performance remained constrained by macroeconomic uncertainty, with average daily traded volumes decreasing by 30 percent week-on-week to 887 million shares.
Looking Ahead
Analysts anticipate a continued cautious approach from the market, with investor sentiment closely monitoring developments surrounding the International Monetary fund (IMF) and proposed constitutional amendments.According to Arif Habib Ltd (AHL), positive progress on these fronts could bolster market confidence and potentially support a recovery following this week’s decline.
Analysts also point to the KSE-100 index’s current price-to-earnings (P/E) ratio of 8.07x, which is slightly below its 15-year average of 8.59x. Coupled with an attractive dividend yield of approximately 6.0 percent, the market remains an appealing option for long-term investors, especially given the limited availability of compelling option investment opportunities.
while broader market sentiment remains cautious, ongoing developments in Pakistan’s economic and political landscape could act as catalysts for a sustained recovery, contingent upon effective management of key issues like inflation and the trade deficit.
(Published in Dawn, November 9th, 2025)
