RECORDER REVIEW

KARACHI: The Pakistan Stock Exchange (PSX) extended its losing streak to a fifth consecutive week, with the benchmark KSE-100 Index shedding 4,044.84 points, or 2.4 percent week-on-week, to close at 162,374.84 points as Brent crude surged make Pakistan’s trade deficit widened and persistent geopolitical tensions compounded domestic economic uncertainty. Broad-based selling across major sectors, particularly refineries, technology, engineering and power, dragged the benchmark lower, while trading activity weakened in share-volume terms across both ready and futures markets.

The latest decline followed four consecutive weekly losses, extending the market’s downward trajectory amid concerns over external account pressures and the potential economic implications of persistently high international energy prices. Brent crude closed the week above USD114 per barrel, compared with the previous week’s average of USD106 per barrel.

The increase of more than USD8 per barrel intensified concerns over the cost of energy imports and the implications for Pakistan’s external account, while domestic economic indicators presented a mixed picture of expanding remittances and tax revenue in the broader economic backdrop but slowing industrial momentum and a widening trade deficit.

The oil-price increase coincided with official data showing that Pakistan’s merchandise trade deficit widened by 21.1 percent during the first quarter of fiscal year 2027 (1QFY27) to USD9.33 billion. The deterioration was attributed to import growth running nearly twice as fast as export expansion.

Industrial production data also pointed to a moderation in momentum. Large-Scale Manufacturing (LSM) recorded a modest growth of 0.67 percent in August 2026.

The Pakistan Bureau of Statistics (PBS) also revised Pakistan’s gross domestic product growth for fiscal year 2026 slightly downward to 3.65 percent. The total size of the economy was reported at USD450.40 billion, while per capita income stood at approximately USD1,896.

On the policy front, Prime Minister Shehbaz Sharif approved a 1 percent sales tax on electric vehicles (EVs) alongside major import tax cuts under a new five-year auto policy. The measures remained subject to formal approval by the federal cabinet and the International Monetary Fund (IMF). The policy was expected to lower vehicle prices over the longer term.

In another domestic financial development, profit rates on National Savings schemes were revised upward by an average of 24 to 40 basis points across major savings instruments. The increase represented a change in the returns offered by the affected savings schemes.

Foreign exchange reserves held directly by the State Bank of Pakistan (SBP) remained stable week-on-week at approximately USD21.50 billion. The unchanged reserve position provided a stable reading for the country’s central-bank foreign exchange holdings during the week, even as the trade deficit widened and international crude prices moved higher.

Trading activity across listed sectors was led by the Refinery sector, which accounted for 19 percent of total market turnover during the week. Technology and Communication followed with a 16 percent volume share, while Investment Banks represented 12 percent. Power generation and distribution accounted for 7 percent, Cement contributed 4 percent, and all other sectors combined made up the remaining 42 percent.

Sectoral performance reflected severe and widespread selling pressure. The Refinery sector led the losses, plunging 10.1 percent week-on-week. Technology and Communication fell 7.7 percent, while Engineering declined 5.5 percent. Power Generation and Distribution dropped 5.0 percent, and oil marketing companies lost 4.6 percent.

Automobiles contracted 3.5 percent, textile composite slipped 2.7 percent and pharmaceuticals declined 2.6 percent. Chemicals fell 2.5 percent, while cement dropped 2.4 percent. Commercial banks lost 2.3 percent, fertilizer eased 2.0 percent and Oil and Gas Exploration Companies declined 1.2 percent. Food and personal care recorded the smallest sectoral fall, edging down 0.4 percent.

Individual stock performance was similarly weak, although a small group of companies recorded gains. Unilever Pakistan Foods Limited (UPFL) led the reported KSE-100 gainers, advancing 3.2 percent week-on-week to close at Rs. 26,376.79 per share. Pakistan Services Limited (PSEL) rose 2.4 percent to Rs. 1,013.96, while TPLRF1 gained 1.3 percent to Rs. 8.90.

On the losing side, Pakistan Telecommunication Company Limited (PTC) recorded the largest decline among the listed stocks, plunging 15.5 percent week-on-week to close at Rs. 45.29 per share. HUM Network Limited (HUMNL) fell 13.3 percent to Rs. 8.05, while Pak-Gulf Leasing Company Limited (PGLC) dropped 12.7 percent to Rs. 13.09.

Total PSX market capitalization contracted by 2.5 percent in rupee terms during the week to Rs. 18.014 trillion, or Rs. 18,014.20 billion, equivalent to USD65.08 billion. In the preceding week, market capitalization stood at Rs. 18.480 trillion, or USD66.74 billion.

Trading activity showed contrasting movements in share volume and transaction value in the readyboard market. Average daily turnover declined by 12.6 percent week-on-week to 392.75 million shares from 449.42 million shares in the preceding week. The reduction amounted to 56.67 million shares in average daily turnover, indicating lower share-volume participation in the ready market.

Despite the decline in share turnover, average daily readyboard trade value increased by 7.3 percent to Rs. 19.29 billion, equivalent to USD69.69 million, from Rs. 17.99 billion, or USD64.95 million, previously. The local-currency value rose by Rs. 1.30 billion, while the US-dollar value increased by USD4.74 million.

Overall, the fifth consecutive weekly decline reflected widespread weakness across the reported sectors amid elevated global oil prices, external account concerns and persistent uncertainty. Although stable reserves, remittance inflows and tax collections provided some support to the economic backdrop, they were accompanied by a widening trade deficit, modest manufacturing growth and a downward revision to the FY26 GDP growth estimate.

Analysts say the competing developments are likely to remain central to investor assessments as the market responds to changes in international oil prices, geopolitical conditions and domestic economic indicators.