The Pakistan Stock Exchange (PSX) witnessed a bearish trend during the outgoing business week, with the benchmark KSE-100 Index losing 2,938 points as investor sentiment remained under pressure. The KSE-100 Index closed the week at 177,166 points, compared with its previous level. During the week, the index fluctuated within a range of 5,048 points, reaching a high of 181,158 points and falling to a low of 176,110 points. Trading activity remained substantial throughout the week, with around 4.22 billion shares changing hands at a total value of approximately Rs205 billion. Meanwhile, the market’s overall capitalization declined by Rs247 billion during the week, settling at around Rs19.88 trillion. The weekly performance reflects continued volatility in the stock market as investors closely monitor domestic economic developments and regional geopolitical conditions. Earlier, Pakistan’s benchmark stock index opened on a positive note on Friday, with strong buying interest across major sectors pushing the KSE-100 Index more than 800 points higher in the early trading session. At around 9:19am, the KSE-100 Index was trading at 177,399.75 points, recording a gain of 807.99 points, or 0.46%, compared with the previous close. The early-session rally reflected renewed investor interest in several key sectors of the market. Automobile assemblers, cement companies, commercial banks, fertiliser manufacturers, oil marketing companies (OMCs) and refineries remained among the prominent areas attracting buying activity. Several index-heavy stocks also traded in positive territory, providing support to the benchmark. Shares of Attock Refinery Limited (ARL), Mari Energies Limited (MARI), Fauji Fertilizer Company (FFC), Habib Bank Limited (HBL), Meezan Bank Limited (MEBL), National Bank of Pakistan (NBP) and United Bank Limited (UBL) were among the notable gainers during the opening phase. The positive start comes a day after the Pakistan Stock Exchange witnessed a volatile trading session amid concerns over geopolitical developments and elevated international oil prices. On Thursday, the KSE-100 Index lost 254.59 points, or 0.14%, to settle at 176,591.77 points. Selling pressure in several heavyweight stocks outweighed selective buying and kept the market in negative territory by the close. Investors are now closely monitoring developments in global financial markets, particularly movements in bond yields, oil prices and international geopolitical conditions, which could influence capital flows and market sentiment. Global markets remain under pressure The positive opening at the PSX came against a mixed backdrop in Asian markets, where several major stock indices remained on track for weekly declines. Investor sentiment globally continued to be affected by rising government bond yields and uncertainty surrounding inflation and fiscal conditions. A diplomatic stalemate in the Gulf region also contributed to a rise in oil prices, with crude prices reaching their highest level in about a month. Higher oil prices have renewed concerns over inflation, particularly for economies that rely heavily on energy imports. For Pakistan, movements in international crude prices remain particularly important because they can affect the country’s import bill, exchange-rate pressures and domestic inflation expectations. In the United States, Treasury yields resumed their upward movement after a brief respite following an unexpected intervention by the US Treasury on Wednesday. US Treasury Secretary Scott Bessent has indicated that the government could potentially expand its purchases of US Treasuries. He has also raised the possibility of fiscal consolidation as authorities seek to address concerns surrounding the country’s growing budget deficit. However, market participants remain cautious about the prospects of significant fiscal adjustment. Analysts have questioned whether sufficient expenditure reductions can be achieved to meaningfully narrow a budget deficit exceeding 6% of US gross domestic product. The rising cost of servicing government debt is another concern. Interest payments alone are estimated to have reached around $1.2 trillion during the year, highlighting the pressure created by elevated borrowing costs. Higher yields pose challenge for equities The continued increase in bond yields has broader implications for international equity markets. Higher yields can increase borrowing costs for governments and businesses while making fixed-income investments relatively more attractive. The impact is particularly significant for technology companies that are undertaking substantial borrowing to finance investments in artificial intelligence infrastructure and other capital-intensive projects. At the same time, higher interest rates increase the discount rate applied to future corporate earnings, potentially putting pressure on equity valuations. Asian markets reflected some of these concerns on Friday. Japan’s Nikkei index declined around 0.8%, taking its losses for the week to approximately 4.4%. South Korean and Taiwanese stocks managed modest gains during the session but remained lower on a weekly basis. Meanwhile, MSCI’s broadest index of Asia-Pacific shares excluding Japan advanced around 0.5%, indicating some selective risk appetite despite continued uncertainty in global markets.
