KSE-100 Falls 1,066 Points in Week as Oil Tops $100Business

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, while Ukrainian drone strikes on Russian refineries and concerns over US energy supplies kept Brent crude elevated, according to AKD Securities.

<h2>IMF agreement</h2> The staff-level agreement on the fourth review of the Extended Fund Facility and the third review of the Resilience and Sustainability Facility provided some support. The agreement paves the way for $1.2 billion in disbursements under the two programmes, subject to approval by the IMF Executive Board, which would take total disbursements to about $5.7 billion.

However, concerns over the widening trade deficit, inflation and the future path of interest rates continued to weigh on investors.

According to Arif Habib, the government raised Rs381 billion against a Rs350 billion target in its latest Pakistan Investment Bonds auction. Cut-off yields rose 26 to 41 basis points across three-, five- and ten-year tenors, while the two-year yield fell 19 basis points; bids for 15-year bonds were rejected. The rise fuelled expectations of a possible policy rate hike at the next monetary policy announcement.

Pakistan&#8217;s foreign exchange reserves held by the State Bank rose by $15 million to $21.5 billion as of Oct 2, while the rupee edged up 0.03 per cent to close at Rs277 against the dollar. Central government debt stood at Rs82.95 trillion at the end of August, up 7.1 per cent year-on-year but down 0.5 per cent month-on-month.

<h2>Sector performance</h2> 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 with 75 and textile composite firms with 43 points.

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

On the positive side, oil marketing companies added 110 points and power companies 36. Pakistan State Oil was the largest single contributor, adding 113 points, with Hub Power, Pakistan Oilfields, Engro Holdings and Mari Energies also supporting the market.

Trading activity weakened: average daily volume fell 18.6 per cent week-on-week to 427 million shares, while the average traded value stood at $67 million, down 2 per cent.

Cement dispatches rose 6 per cent year-on-year to 4.62 million tonnes in September on a 7 per cent rise in domestic sales, while banking deposits grew 14 per cent year-on-year to Rs39.2 trillion at end-August.

Petrol prices rose 2.1 per cent to Rs398.96 per litre while high-speed diesel fell 0.9 per cent to Rs395.72. Analysts expect quarterly earnings and geopolitical developments to shape sentiment; easing inflation and any Middle East de-escalation could support monetary easing, but persistent uncertainty is likely to constrain gains.