PSX closes lower as geopolitical uncertainty weighs

The Pakistan Stock Exchange (PSX) saw a decline during the recent week due to worries about an imminent US-Iran deal and the reopening of the Strait of Hormuz, which left investors hesitant. The KSE-100 index dropped 0.73 percent, or 1,325 points, week-over-week, settling at 180,104. Trading activity saw an uptick, with daily volume increasing 14 percent week-over-week to 853.3 million shares, and traded value rising 13 percent to $137m.

However, some sectors were more robust than others, such as exploration and production (E&P), refineries, leather and tanneries, and miscellaneous companies, which collectively added 1,135 points to the index, while power, technology, cement, investment banks, and insurance contributed negatively. Among individual stocks, Hub Power had the most significant negative impact, pulling 435 points from the index.

Conversely, Habib Bank was the most significant positive contributor, adding 280 points. Foreign investments were relatively even, with individuals buying equities net of $16.3 million and companies selling them net of $5.2 million. Banks and insurance companies were the largest sellers, with net sales of $11.2m and $6.3m, respectively.

Automobile sales in July rose nearly 80 percent year-on-year but fell 13 percent month-on-month. Pakistan's fiscal position showed improvement, with the fiscal deficit at 2.6 percent of GDP, and the primary surplus hitting a record 2.9 percent of GDP. The rupee strengthened slightly, rising 0.04 percent week-over-week to close at Rs277.7 against the dollar.

Oil production decreased slightly, while gas output rose. Analysts anticipate that geopolitical developments and corporate results will be crucial market drivers as the earnings season progresses.