By Moaaz Manzoor

The Pakistan Stock Exchange ended the outgoing week under pressure, with the benchmark KSE-100 Index shedding 6,439 points, or 3.5% week-on-week, to close at 175,803 points as continued tensions between the United States and Iran kept crude oil prices elevated and weakened investor sentiment.

The market declined sharply at the beginning of the week, losing 2,315 points on Monday and another 6,408 points on Tuesday amid heightened geopolitical uncertainty. Sentiment recovered during the middle of the week after US President Donald Trump withdrew his proposed 20% transit fee on the Strait of Hormuz, but renewed tensions later reversed part of the recovery.

According to Arif Habib Limited, commercial banks exerted the largest drag on the benchmark index, shaving 1,946 points during the week. Exploration and production companies reduced the index by 990 points, followed by cement companies with 809 points, fertilizer stocks with 425 points and power-generation and distribution companies with 381 points.

No sector made a positive contribution to the KSE-100 Index during the week, indicating that selling pressure remained broad-based across the market.

At the company level, United Bank Limited was the largest negative contributor, erasing 555 points from the benchmark index. Pakistan Petroleum Limited reduced the index by 394 points, followed by Oil and Gas Development Company with 366 points, Lucky Cement with 353 points and Hub Power Company with 305 points.

Among the limited gainers, Pioneer Cement added nine points to the benchmark index, followed by Cnergyico PK with six points.

Topline Securities attributed the market’s decline primarily to continued geopolitical tensions between the United States and Iran, which kept international crude oil prices elevated and weighed on investor confidence.

The brokerage also highlighted several domestic economic developments during the week. Pakistan’s net foreign direct investment declined 94% to US$14 million in June 2026 from US$214 million in May.

Pakistan’s Real Effective Exchange Rate increased to 106.44 in June from 106.08 in May, while the current account posted a deficit of US$649 million in June compared with a surplus of US$500 million in the preceding month.

Car sales stood at 22,741 units in June, increasing 4% year-on-year and 29% month-on-month, according to the figures cited by Topline Securities.

On the investor-flow side, mutual funds remained net sellers, offloading equities worth US$28 million. Individual investors and foreign corporates emerged as net buyers, purchasing shares worth US$9.9 million and US$9.2 million, respectively.

According to AHL, average daily trading volume declined 31% week-on-week to 740 million shares, while the average daily traded value fell 28% to US$124 million.

Topline Securities also reported trading volume of 740 million shares and traded value of Rs34 billion, reflecting lower market participation amid heightened volatility and geopolitical uncertainty.

Looking ahead, AHL said the index’s direction would remain closely linked to geopolitical developments, with any progress in negotiations between the United States and Iran likely to provide an upside trigger for the market.

The brokerage said the ongoing corporate earnings season could also become an important driver of market direction in the near term as listed companies continue to announce their financial results.

AHL noted that the KSE-100 Index is currently trading at a price-to-earnings ratio of 8.1 times and offers a dividend yield of 6.3%.

Credit: INP-WealthPk