KSE-100 Index Bleeds after historic high

Staff Report

After ending the previous week on a record-breaking high, the benchmark KSE-100 Index settled at 138,217.58, marking a decline of 0.27 percent. The index remained volatile throughout the session, swinging between an intra-day high of 139,201 and a low of 138,150.

According to Topline Securities, the market remained range-bound as investors engaged in profit-taking ahead of the end-July contract expiry. Pressure came from FFC, UBL, OGDC, SYS, and HUBC, which together dragged the index down by 438 points. However, HBL, EFERT, and PABC added a combined 152 points, providing limited support.

Trade unrest fuels market jitters

The Traders Strike in Pakistan and FBR dispute created a tense backdrop for the market session. Business leaders across major cities observed shutter-down protests against what they call anti-business tax enforcement by the FBR. While some associations continued talks with the government, many retailers and wholesale markets remained closed, amplifying investor caution.

The ongoing tax conflict between the government and traders — including proposed documentation of the retail sector and expansion of the tax base — has raised uncertainty over policy continuity and political stability.Volatility Hits KSE-100 as Index Sheds 1509 Points

Market breadth weakens as volumes drop

Trading activity also showed signs of fatigue. Volume on the all-share index dipped to 608.19 million, down slightly from 609.44 million in the previous session. Value traded shrank sharply to Rs23.52 billion, compared to Rs31.62 billion on Friday.

Among actives, Prud Mod.1st led with 58.74 million shares, followed by K-Electric Ltd at 53.17 million, and Pak Int.Bulk at 51.73 million. Out of 479 companies, 193 advanced, 245 declined, while 41 remained unchanged.

Last week’s rally overshadowed by strike uncertainty

Just days earlier, the PSX had wrapped up its strongest weekly performance ever, with the KSE-100 Index gaining 4,297 points, or 3.2 percent, and closing at an all-time high of 138,597 points. The surge was driven by strong macroeconomic indicators, corporate earnings expectations, and positive investor sentiment — despite foreign institutional outflows and seasonal slowdown.

However, Monday’s decline signals a shift, as the Traders Strike in Pakistan and FBR tax crackdown continue to spook market participants. Analysts now warn that further escalation may erode confidence in short-term equity positions.

Rupee dips slightly amid external headwinds

Meanwhile, the Pakistani rupee depreciated marginally against the US dollar, closing at 284.95 in the interbank market — down by Re0.08 or 0.03 percent. The minor drop reflects a stable FX outlook, though regional uncertainty may build pressure in coming sessions.

Global markets watch tech earnings, Japan election fallout

In Asia, shares and the Japanese yen held steady, even after Sunday’s upper house election weakened Prime Minister Shigeru Ishiba’s control. The yen firmed by 0.4 percent to 148.29, while Wall Street futures braced for a key week of tech earnings.

Investors are also tracking global trade negotiations, as the US inches closer to its August 1 tariff deadline. Reports suggest Trump and China’s Xi Jinping may meet later in the year, but no confirmation has emerged.

Outlook hinges on govt-trader tax dialogue

As tensions rise over the Traders Strike in Pakistan and FBR enforcement, analysts say stock market stability now hinges on the government’s ability to negotiate with traders. A breakthrough could restore confidence and push the KSE-100 back toward historic highs. However, prolonged deadlock may deepen volatility across equities and the broader economy.