Karachi, June 14, 2025 – The Pakistan Stock Exchange (PSX) saw its weekly gains wiped out by rising geopolitical tensions in the Middle East, particularly due to renewed hostilities between Iran and Israel.
Despite starting on a strong note, the benchmark KSE-100 Index closed the week with a modest gain of 0.4% on a week-on-week (WoW) basis.
Investor sentiment was initially boosted by the federal budget 2025–26, which preserved status quo on Capital Gains Tax (CGT) and dividend taxation. The budget’s overall tone of fiscal consolidation helped lift market confidence in the early part of the week, supporting an optimistic outlook for the PSX.
However, the momentum weakened significantly by the end of the week following reports of a deadly Israeli airstrike targeting Iranian military officials. The attack escalated regional tensions and triggered risk-off sentiment across global markets, with the PSX not immune to the impact.
Further compounding the pressure on equities was the announcement by the United States of a steep 50% tariff on steel imports from key trading partners, sparking concerns about disruptions to global trade. These developments overshadowed domestic economic indicators that were otherwise positive.
Key data released during the week included:
1. Large-Scale Manufacturing (LSM) output for March 2025, which recorded a year-on-year increase of 1.8%;
2. Remittances for May 2025, which surged to $3.7 billion — up 16% month-on-month and 14% year-on-year;
3. Results of the weekly Treasury Bill auction, where the government raised Rs853 billion against a target of Rs900 billion, with yields declining between 1 to 25 basis points;
4. Car sales in May 2025 rising sharply to 14,762 units, reflecting a 35% YoY and 39% MoM increase.
Despite late-week volatility, market participation remained strong. Average weekly trading volumes rose to 907 million shares (up 37% WoW), while average weekly trading value climbed to Rs37 billion, marking a 33% increase.
Analysts note that while the PSX started the week on a bullish note, ongoing geopolitical instability remains a key risk to sustained investor confidence in the weekly outlook.