The Pakistan Stock Exchange (PSX) closed the week ending October 25, 2025, in the red, with the benchmark KSE-100 Index shedding 502 points or 0.31% week-on-week to settle at 163,304.13 points compared to last week’s 163,806.22. The market spent much of the week fluctuating within a narrow range, reflecting a tug of war between improving macroeconomic indicators and heightened investor caution stemming from regulatory and earnings-related developments.
The week began with optimism as easing geopolitical tensions and Pakistan’s return to a current account surplus of $110 million in September 2025 — reversing a $325 million deficit in August — boosted investor sentiment. However, as the week progressed, selling pressure resurfaced following the National Electric Power Regulatory Authority’s (NEPRA) extensive revisions to K-Electric’s Multi-Year Tariff (MYT) for FY2024–30. The move triggered widespread concern in the energy sector, particularly after K-Electric’s CEO, Syed Moonis Abdullah Alvi, criticized the changes, describing the reductions and modifications as unsustainable for operations.
This regulatory development sparked a sharp sell-off in K-Electric’s shares, which plunged 5.59% during the week, dominating trading volumes with over 109 million shares exchanged. The ensuing uncertainty weighed heavily on investor sentiment, particularly in power, utilities, and banking sectors, as market participants opted for a cautious stance ahead of rollover week.
Adding to the downward pressure, several major companies reported weaker-than-expected quarterly earnings. Kot Addu Power Company Limited (KAPCO) saw its profit plummet 99.6% year-on-year to Rs4.88 million, while Bank Islami Pakistan Limited (BIPL) posted a 50% drop in nine-month earnings to Rs5.07 billion. This wave of disappointing results further dampened market enthusiasm, prompting profit-taking across key index-heavy sectors.
Despite the bearish tone, macroeconomic fundamentals provided a degree of stability. The Real Effective Exchange Rate (REER) appreciated by 1.64% month-on-month to 101.73, signaling improved competitiveness. The Pakistani rupee remained stable, closing at 281.02 against the US dollar, while the State Bank of Pakistan’s (SBP) reserves edged higher to $14.45 billion. Foreign direct investment (FDI) inflows also showed modest improvement, reaching $186 million in September compared to $175 million in August, though first-quarter FY26 inflows were down 34% year-on-year at $569 million.
In terms of market capitalization, the total value of listed companies contracted to Rs4.83 trillion from Rs4.86 trillion a week earlier. In US dollar terms, market capitalization slipped to $17.20 billion, marking a 0.59% decline. The USD-based return turned negative at -0.27%, reversing last week’s positive 0.45%.
Sector-wise, Commercial Banks led the decline, shaving off 502 points from the index amid profit-taking and a weaker earnings outlook. The Power Generation & Distribution sector followed with a 414-point drag, largely driven by K-Electric’s slump. The Cement sector also lost ground, shedding 338 points on expectations of reduced construction activity and fluctuating coal prices.
Conversely, energy-linked counters offered some resilience. Oil & Gas Exploration Companies added 404 points to the index, bolstered by Pakistan Petroleum Limited (PPL) and Oil and Gas Development Company (OGDC), contributing 288 and 240 points respectively. The Oil & Gas Marketing sector added another 56 points, supported by gains in Pakistan State Oil (PSO) and Shell Pakistan.
On the individual performance front, top positive contributors included PPL (+288), OGDC (+240), MCB (+209), HBL (+133), and PSX (+124). The major laggards were BAHL (-404), MEBL (-172), KEL (-164), HUBC (-148), and LUCK (-112).
Foreign investors remained net sellers, offloading $7.09 million worth of equities, led by foreign corporates (-$4.87 million) and overseas Pakistanis (-$2.16 million). Local investors absorbed much of this pressure, with individual investors emerging as net buyers of $12 million, followed by insurance companies (+$2.24 million). However, mutual funds (-$3.7 million), companies (-$2.7 million), and banks (-$0.43 million) remained on the selling side.
Overall, the week highlighted a cautious investor tone as profit-taking, earnings weakness, and regulatory uncertainty offset improving macroeconomic signals. Market observers expect short-term volatility to persist ahead of key corporate announcements and policy developments in the coming weeks.
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