RECORDER REVIEW

KARACHI: The futures market at the Pakistan Stock Exchange (PSX) painted a contrasting picture this week, as the futures spread widened sharply even as overall participation in derivative trading plummeted.

The futures spread jumped by 505 basis points to 10.89 percent from last week’s 5.84 percent, indicating stronger expectations of price appreciation in select counters.

However, the average daily traded volume in the futures segment plunged by 71 percent, falling to just 100.55 million shares compared to 346.47 million shares the previous week. Likewise, the monetary value of futures trades dropped by 58.1 percent, declining from Rs19.98 billion to Rs8.37 billion over the same period.

According to analysts, the dramatic pullback reflects a broader shift in investor behaviour. The move comes as investors respond to macroeconomic cues and policy announcements. These developments have boosted confidence in long-term fundamentals, leading many traders to favour direct equity holdings over leveraged futures positions.

Market observers say the contraction in futures activity should not be misread as a loss of confidence but rather as a recalibration.