KARACHI: The Pakistan Stock Exchange (PSX) remained volatile during the outgoing week as escalating geopolitical tensions, elevated international oil prices and rising bond yields offset optimism over Pakistan’s Staff-Level Agreement (SLA) with the International Monetary Fund (IMF).

The benchmark KSE-100 index fell 0.6 per cent week-on-week to close at 167,089 points, shedding 1,066 points, according to Arif Habib Ltd (AHL).

Market sentiment remained subdued amid attacks on key shipping routes, with Yemen’s Houthis expanding their targets to Saudi Arabia’s civilian infrastructure and energy facilities. Ukrainian drone strikes on Russian refineries and concerns over US energy supplies also kept Brent crude above $100 a barrel, according to AKD Securities Ltd.

Index loses 1,066 points in outgoing week as Brent futures remain above $100 a barrel

The SLA on the fourth review of the Extended Fund Facility (EFF) and the third review of the Resilience and Sustainability Facility (RSF) provided some support. The agreement paves the way for disbursement of $1.2 billion under the two programmes, subject to approval by the IMF Executive Board. Total disbursements under the two programmes would reach about $5.7bn.

However, concerns over the widening trade deficit, inflation and the future interest-rate trajectory continued to weigh on investors.

According to AHL, the government raised Rs381bn against a Rs350bn target in its latest Pakistan Investment Bonds (PIBs) auction. Cut-off yields rose by 26-41 basis points across three-, five- and 10-year tenors, while the two-year yield declined by 19 basis points. Bids for 15-year bonds were rejected. The yield rise fuelled expectations of a possible policy rate hike at the next monetary policy announcement.

Pakistan’s foreign exchange reserves held by the State Bank of Pakistan rose by $15m to $21.5bn as of Oct 2. The rupee appreciated marginally by 0.03pc to close at Rs277 against the dollar.

Central government debt stood at Rs82.95 trillion at the end of August, up 7.1pc year-on-year but down 0.5pc month-on-month.

Sector-wise, banks were the biggest drag on the benchmark, shedding 566 points, followed by fertiliser companies with 234 points, automobile assemblers with 97, cement companies with 75 and textile composite firms with 43 points.

Habib Bank, MCB Bank and United Bank were the largest negative contributors, collectively accounting for 388 points of the decline. Fatima Fertiliser and Fauji Fertiliser Company also weighed on the index.

Oil marketing companies led positive contributions, adding 110 points, followed by power companies with 36 points. Pakistan State Oil was the largest individual contributor, adding 113 points, while Hub Power Company, Pakistan Oilfields, Engro Holdings and Mari Energies also supported the market.

Trading activity weakened during the week. Average daily volume fell 18.6pc week-on-week to 427 million shares, while the average traded value stood at $67m, down 2pc.

In the cement sector, despatches rose 6pc year-on-year to 4.62 million tonnes in September, supported by a 7pc increase in domestic sales, while exports remained flat. In the first quarter of FY27, despatches rose 4pc to 13.14m tonnes, with local sales up 8pc despite an 11pc decline in exports.

Banking sector deposits increased 14pc year-on-year to Rs39.2tr at the end of August, AKD Securities said. Cotton arrivals rose 5pc to 3.2m bales during September.

Oil production fell 6.4pc week-on-week to 63,700 barrels per day, while gas output declined 1.4pc to 2,999 million cubic feet per day, mainly because of lower production from northern oilfields and the Mari, Sui and Sharf fields.

Petrol prices increased 2.1pc to Rs398.96 per litre, while high-speed diesel prices fell 0.9pc to Rs395.72.

Elsewhere, Sindh Engro Coal Mining Company is expanding its Thar Block-II mine to supply additional coal to Lucky Electric Power Company, potentially enabling a complete transition to local coal and reducing reliance on imports.

Looking ahead, analysts expect quarterly earnings announcements and geopolitical developments to shape market sentiment. The index was trading at a 7.5x price-to-earnings ratio, with a dividend yield of 6.7pc.

They said easing inflation, improving economic indicators and any de-escalation in the Middle East could moderate oil prices and strengthen the case for monetary easing. However, persistent geopolitical uncertainty could continue to constrain gains.

Published in Dawn, October 11th, 2026