Key Takeaways
- The Pakistan Stock Exchange (PSX) lost 2,320.78 points on Friday.
- Geopolitical tensions and rising oil prices fueled the decline.
- Market sentiment remains cautious amid ongoing US-Iran conflicts.
The Pakistan Stock Exchange (PSX) experienced a significant downturn on Friday, losing 2,320.78 points to close at 175,802.79 points, marking the first decline in two sessions. This drop was primarily driven by escalating geopolitical tensions and rising oil prices amid growing uncertainty in the Middle East.
According to reports, the US and Iran have intensified their attacks beyond military targets, raising concerns about a broader conflict and potential supply disruptions through the Strait of Hormuz. These fears have heightened inflationary pressures, particularly for countries heavily reliant on energy imports, such as Pakistan.
Topline Securities Ltd noted that the index remained under pressure throughout the day, with the negative sentiment largely attributed to these geopolitical tensions. Ali Najib, Deputy Head of Trading at Arif Habib Ltd, observed that the PSX saw mixed trading activity, opening higher due to selective buying before profit-taking emerged in the latter half as investors booked gains ahead of the weekend.
The market's cautious stance was further influenced by fresh exchanges of strikes between the US and Iran. Analysts believe that this ongoing uncertainty will continue to weigh on investor sentiment, despite the current corporate earnings season and appealing valuations which might support certain stocks.
On a macroeconomic front, Pakistan recorded a current account deficit (CAD) of $649 million in June, while the fiscal year 2025-2026 ended with a marginal CAD of $139 million. Technology exports reached a record $4.6 billion, up 21% year-on-year, accounting for 46% of total services exports. The Real Effective Exchange Rate rose to 106.44 in June, its highest level since September 2018, while net FDI inflows stood at $14 million.
Notably, Engro Holdings, Systems Ltd, United Bank, Oil and Gas Development Company, Pakistan Petroleum, Hub Power, Meezan Bank, Habib Bank, and Lucky Cement faced profit-taking pressure, collectively shaving 1,105 points off the benchmark. Market activity remained relatively subdued, with traded volume falling 15.73% to 621 million shares and traded value dipping 13.65% to Rs29.8 billion.
Cnergyico PK led the volume chart with 86.4 million shares. Analysts predict that market sentiment will remain cautious as investors closely monitor geopolitical developments, but they also believe that the current corporate earnings season and appealing valuations might continue to bolster certain stocks.
