Karachi, April 26, 2025 – The Pakistan Stock Exchange (PSX) is expected to remain under the influence of geopolitical sentiments in the coming week starting April 28, 2025.
Analysts anticipate that ongoing tensions, especially between India and Pakistan, will significantly shape investor behavior and market dynamics.
According to market analysts at Arif Habib Limited, PSX sentiments will be dictated largely by external geopolitical events, overshadowing other market fundamentals. With rising uncertainty in the region, investors are likely to adopt a cautious approach despite the ongoing corporate earnings season, which may generate selective stock-specific activity.
The benchmark KSE-100 index of PSX is currently trading at a price-to-earnings ratio (PER) of 6.3x for 2025—lower than its 10-year average of 8.0x. This indicates a potential undervaluation, further supported by a healthy dividend yield of around 8.0%, compared to the historical average of 6.5%. However, market sentiments appear too fragile to capitalize on these attractive valuations fully.
During the past week, the KSE-100 index witnessed a mixed trend. It initially gained momentum due to positive macroeconomic indicators but lost ground mid-week as regional sentiments soured. The index eventually closed at 115,469 points, marking a weekly decline of 1,846 points or 1.6%.
On the macro front, banking sector deposits grew by 11.7% year-on-year in March 2025. However, the State Bank of Pakistan’s foreign exchange reserves fell by USD 367 million, closing the week at USD 10.2 billion—further dampening market sentiments.
Sector-wise, the decline in the PSX was led by Exploration & Production (-594 points), Commercial Banks (-295 points), and Technology (-188 points). Scrip-wise, notable negative contributors included UBL (-507 points), MARI (-369 points), and PSO (-181 points). Conversely, positive sentiments were seen in Fertilizer and Food sectors, with FFC (+403 points) and MEBL (+237 points) leading the gains.
Foreigners turned net buyers, injecting USD 2.09 million into the PSX, particularly in Oil Marketing Companies and E&Ps. Local investors, however, showed weaker sentiments, as Mutual Funds and Broker Proprietary Traders offloaded USD 18.9 million and USD 2.02 million, respectively.
With average weekly volumes falling 32% to 599 million shares, and value traded down 10% at USD 104 million, the PSX enters next week with sentiments tethered to geopolitical shifts, signaling a cautious market outlook ahead.