KARACHI: The Pakis­tan Stock Exchange (PSX) closed in the red on Friday, snapping a five-session record-setting rally, as profit-taking and rising macroeconomic concerns prompted investors to adopt a cautious approach ahead of the weekend.

Despite an early extension of the bullish momentum, the benchmark KSE-100 index reversed gains after hitting an intraday high of 1,166 points (0.8pc) and ended the session down by 264.34 points, or 0.18pc, to close at 145,382.80.

Ahsan Mehanti of Arif Habib Corporation said the market came under pressure due to profit-taking in overbought stocks. Investor sentiment was dampened by a 44pc year-on-year surge in the July trade deficit to $2.8bn.

Additionally, concerns over foreign outflows, provincial tax collection shortfalls, the government’s failure to meet cash surplus targets under IMF conditions, and heightened political noise contributed to the bearish close.

According to Topline Securities Ltd, the market saw early gains but investors preferred to secure profits before the weekend, reflecting growing caution amid uncertain macroeconomic signals.

Engro Holdings, Fauji Fertiliser, Oil and Gas Development Company, and MCB Bank were the top contributors to the index, collectively adding 395 points. However, losses in Engro Fertiliser, Lucky Cement, Systems Ltd, Mari Petroleum, and Hub Power wiped out those gains, dragging the index down by 399 points.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, noted that investors responded to economic signals by rotating across sectors and booking selective profits.

He said the market’s measured tone reflected sensitivity to trade data, rising yields, and monetary trends, prompting a temporary pause in aggressive buying.

The State Bank of Pakistan’s foreign excha­nge reserves fell by $72 million to $14.23bn as of Aug 1 — the third consecutive weekly decline — due to external debt repayments.

Investor participation remained stable, with 544.9 million shares changing hands and total turnover reaching Rs45.4bn.

Looking ahead, analysts expect possible consolidation or a minor correction. The 145,000 level is likely to act as the first support, followed by 143,000, while 150,000 remains a key resistance on the upside.

Published in Dawn, August 9th, 2025