PSX struggles on weak indicators

Benchmark KSE-100 index recovers late, ends week lower by 670 points Pakistan Stock Exchange (PSX) fell 0.4% during the outgoing week, shedding 670 points, as persistent geopolitical tensions, elevated crude oil prices and concerns over a possible rate hike dampened investor sentiment. On a day-on-day basis, political clouds kept sentiment subdued on Monday, with the benchmark KSE-100 index declining 1,965 points (-1.18%) to close at 165,124. On the next day, the PSX witnessed a mixed and volatile session, when the index declined 348 points (-0.21%) to close at 164,776, slipping below the key psychological support level of 165,000. On Wednesday, the market tentatively rebounded amid geopolitical uncertainty, with the benchmark index gaining 641 points (+0.39%) to close at 165,418, reclaiming the psychological level of 165,000. Positive momentum continued on the second last day of the trading week as the PSX held ground above 166k. The index gained 769 points (+0.46%) and closed at 166,186. The market concluded the week with a range-bound session, modestly rising by 234 points (+0.14%) at 166,420. "The KSE-100 declined marginally by 0.4% week-on-week to 166,419 points, shedding 670 points, primarily due to persistent geopolitical uncertainty," said Arif Habib Limited (AHL) in its weekly report. Among major economic data, Pakistan's trade deficit widened 5% year-on-year (YoY) and 7% month-on-month (MoM) to $3.53 billion in September 2026 as exports increased 18% YoY and 17% MoM to $2.96 billion, while imports grew 11% YoY and MoM to $6.49 billion. During 1QFY27, the trade deficit expanded 15% YoY to $10.77 billion, with exports rising 11% to $8.45 billion, while imports increased 13% to $19.21 billion. AHL mentioned that the government raised Rs685.5 billion in T-bills' auction against the target of Rs550 billion, with cut-off yields inching up 0.5 basis point in three-month and 12-month tenors, while declining 5.1 basis points in the one-month and 17.9 basis points in the six-month tenor. The largest amount of Rs310.1 billion was raised via three-month papers. The PSX recorded its highest-ever monthly addition of 25,280 new investor accounts in September, bringing total UINs to a record 656k, up 55% YoY from 423k in September 2025, reflecting growing investor confidence and broader participation in Pakistan's capital market. Pakistan's gross Roshan Digital Account (RDA) inflows reached $14,157 million as of Sept'26. Out of the total received funds, $2,146 million has been repatriated while $8,937 million has been utilised locally. With this, the net repatriable liability stood at $3,074 million. Oil production declined 1.7% WoW to 62.5k barrels per day, mainly due to lower flows from northern fields, while gas production decreased slightly by 0.2% WoW to 2,992 mmcfd, driven by lower production from Uch, Nashpa and Sharf. Auto sales (cars, LCVs, vans and jeeps) decreased 3% MoM to 15.1k units during Sept'26, reflecting a decline of 12% YoY, while cumulative sales during 1QFY27 increased 19% YoY to reach 50.5k units. Pakistan recorded a current account deficit of $356 million in September, compared to a surplus of $133 million in September last year and a deficit of $73 million in Aug'26, taking cumulative deficit for 1QFY27 to $874 million, up from $755 million in the same period of last year. Among petroleum prices, motor spirit recorded a 2.1% WoW decline to Rs390.23/litre, while high-speed diesel rose 0.3% to Rs396.96/litre, AHL added. Topline's weekly review noted that the KSE-100 index continued its downward trajectory, declining 0.4% WoW, primarily driven by elevated crude oil prices amid US-Iran geopolitical tensions and expectations of a potential policy rate hike by the State Bank of Pakistan (SBP) at its upcoming monetary policy meeting to contain inflationary pressures. Key developments during the outgoing week included: (1) automobile sales, as reported by PAMA, totalled 15,104 units in September 2026, down 12% YoY and 3% MoM; (2) the Large-Scale Manufacturing (LSM) Index increased 0.7% YoY in August 2026 but declined 5% MoM; (3) the current account recorded a deficit of $356 million in September 2026, widening from $73 million in August 2026; and (4) Pakistan's Real Effective Exchange Rate (REER) rose to 108.93 in September from 107.92 in August. Average daily traded volume and value during the week stood at 449 million shares and Rs18 billion, respectively, Topline said.