Karachi, April 12, 2025 – Investors at the Pakistan Stock Exchange (PSX) are bracing for another turbulent week ahead, as global economic tensions and local corporate earnings are expected to drive market sentiment.
The recent imposition of tariffs by former U.S. President Donald Trump continues to rattle international markets, and PSX investors remain cautious while tracking geopolitical and economic developments closely.
Despite the prevailing uncertainty, analysts at Arif Habib Limited maintain a cautiously optimistic outlook for the PSX in the coming week. They note that the U.S. has paused the enforcement of reciprocal tariffs for all countries—excluding China—for a 90-day period. Combined with a downward trend in global commodity prices, this temporary relief is expected to support the index and offer breathing space to jittery investors.
The upcoming corporate results season is another key factor likely to influence investor behavior. As quarterly earnings begin to roll in, certain stocks at the PSX are anticipated to attract investor interest based on their performance expectations. Historically, earnings announcements serve as catalysts for short-term price movements and sector rotation among investors.
Currently, the PSX benchmark KSE-100 index is trading at a price-to-earnings ratio (PER) of 6.2x for 2025, below its 10-year average of 8.0x, while offering an attractive dividend yield of approximately 8.3%—well above the long-term average of 6.5%. This valuation gap may entice value-seeking investors, especially those eyeing potential upside during the results season.
The past week was marked by historic volatility, with the KSE-100 witnessing a single-day plunge of 8,688 points (-7.3%), echoing global sell-offs sparked by tariff anxieties. However, markets recovered partially after Trump announced a temporary pause on tariffs exceeding 10%. This reversal, along with local developments such as Pakistan’s international mineral mining conference and major resource discoveries in Balochistan, helped stabilize investor sentiment.
The PSX saw mixed sectoral performance, with negative contributions from banks, fertilizers, E&P, technology, and power sectors. However, gains in cement, pharmaceutical, and automobile assembler sectors provided partial support. Foreign investor activity remained net negative, with USD 9.9 million in outflows, while local mutual funds and individuals also contributed to the selling pressure.
As trading resumes next week, PSX investors are expected to maintain a cautious yet opportunistic stance—closely monitoring global tariff developments and corporate earnings to guide their decisions.