RECORDER REVIEW

KARACHI: Activity in the Pakistan Stock Exchange (PSX) futures market remained selective during the outgoing week, as investors recalibrated positions following a surprise policy rate cut by the State Bank of Pakistan (SBP) and the KSE-100 Index’s move to fresh highs.

A notable development during the week was the sharp narrowing of the futures spread, which declined significantly 240 bps to 14.15 percent compared to the previous week’s 16.54 percent.

Analysts said the contraction in spreads signalled improved price discovery and reduced leverage-driven speculation, suggesting a healthier futures market structure.

Average daily futures volumes declined 7.5 percent week-on-week from 222.23 million to 205.66 million shares, reflecting reduced speculative participation after recent sharp gains in the cash market.

Despite the drop in volumes, the value of futures trading increased from Rs11.82 billion to Rs12.40 billion shares, an increase of 4.9 percent, indicating that participants continued to build positions in high-conviction, index-heavy stocks, particularly in the banking, power and select industrial sectors.