Business
Pakistan’s stock market needs depth, not drama | The Express Tribune
With most gains driven by financials and energy giants, PSX lacks broad participation needed for durable bull run
KARACHI:
Pakistan’s stock market has been a study in contrasts this year: pockets of bullish enthusiasm punctuated by sharp swings that leave investors – and policymakers – uneasy. The benchmark KSE-100 index, which began 2025 on a recovery path after a turbulent 2024, has repeatedly tested new highs and then surrendered large chunks of gains within days, illustrating how sensitive the Pakistan Stock Exchange (PSX) has become to domestic policy cues, regional geopolitics, and global risk sentiment.
On October 24, 2025, the index traded around the mid-160,000s intraday, showing ranges that investors described as “wide” and “whippy” rather than steady appreciation. Volatility has not been purely technical; it has often been triggered by identifiable events.
In April 2025, trading was halted for 45 minutes after the KSE-100 plunged more than 5% in a single session as global risk aversion spiked and regional uncertainty rose – an episode that underscored how quickly sentiment can reverse even when fundamentals appear to be stabilising.
The market’s dependence on foreign portfolio flows, and its limited depth compared with larger emerging markets, means that short, concentrated flows can move prices dramatically.
Domestic macro policy has been another major driver of market moves. The State Bank of Pakistan (SBP)’s easing cycle through the first half of 2025, including rate cuts totalling several hundred basis points compared with 2024 peaks, supported a recovery in interest-sensitive sectors and encouraged risk appetite among local institutional investors.
But monetary easing also raised questions about inflation and currency stability, which, in turn, prompted profit-taking when headlines suggested rising external pressures or potential reversals in policy. That tug-of-war between easing for growth and guarding against macro risks has been priced into PSX volatility.
The market’s advances have been concentrated. Financials, selected energy names, and large exporters accounted for a disproportionate share of gains during rallies, while small-cap and mid-cap segments frequently lagged or underperformed during corrections. This concentration increases systemic volatility because heavy exposure to a few big names magnifies the effect of any negative news tied to those companies or sectors.
Even on days when the headline index gains, breadth often remains narrow – another red flag for investors seeking durable rallies. PSX market summaries and turnover statistics show recurrent patterns of heavy volume on a limited number of symbols.
Foreign investor behaviour has been decisive at turning points. Inflows associated with short-term hedge funds or opportunistic foreign portfolio investors have magnified rallies, but sudden stops or reversals – prompted by global events such as changes in US interest rate expectations or geopolitical flare-ups – have intensified declines.
Local institutional participation has grown but still struggles to fully offset the volatility imparted by cross-border capital. The exchange’s 2025 annual report and market data highlight both increasing market capitalisation and the still-fragile composition of flows.
Liquidity dynamics add another layer to the story. While market capitalisation has expanded in the past year, turnover ratios and average daily traded value show episodes of thin liquidity, especially outside the top 20 stocks.
Thin trading amplifies price moves: modest sell orders can cascade if buyers are scarce. Recent intraday ranges – sometimes exceeding several thousand index points – reflect that liquidity mismatch. For risk managers and retail investors, that means stop-losses and margin calls can be triggered more easily now than in a deep, liquid market.
Geopolitical shocks have repeatedly convulsed the PSX. In months when regional tensions flared, the index suffered steep sell-offs and occasionally triggered cooling mechanisms or temporary halts; conversely, diplomatic breakthroughs or easing of tensions sparked quick recoveries and short squeezes.
The market’s sensitivity to such events is understandable – exporters, commodity prices, and investor confidence all react to geopolitical shifts – and it has made calendar risk a permanent feature of the PSX investment playbook.
Macro data and external account developments feed into market psychology as well. Pakistan’s trade deficits, remittance trends, and foreign exchange reserves are monitored closely by investors, and any sign of deteriorating external buffers tends to coincide with domestic equity sell-offs.
While policy actions – tariff adjustments, fiscal consolidation measures, or SBP interventions – may eventually stabilise macro variables, the market often reacts to the perceived probability and timing of those measures long before their economic impact is visible. Official monthly KSE indicators compiled by the SBP and PSX show how closely market moves track macro announcements.
Investor composition has evolved. Retail participation has risen alongside digital access to trading, while institutional investors – including pension funds and mutual funds – have steadily increased their presence. This democratisation brings both benefits – a broader investor base and deeper domestic pools of capital – and risks, as less-experienced retail investors can exacerbate momentum trading during both rallies and panics.
Education, stricter disclosure standards, and improved investor protection are therefore essential complements to any structural reform aimed at calming volatility.
Regulatory responses so far have been pragmatic but reactive. The PSX and the Securities and Exchange Commission of Pakistan (SECP) have used circuit breakers, trading halts, and disclosure requirements to limit disorderly moves, but long-term solutions require deeper structural changes.
These include broadening the investor base through institutional development, improving corporate governance, enhancing market infrastructure to reduce settlement and operational risk, and encouraging product innovation – such as derivatives and options – that allow for hedging of market and currency risk.
PSX’s 2025 initiatives around new index products and market data aim in that direction, but their stabilising impact will accrue only over time.
Volatility on the PSX is likely to persist – at least in the near term – because the market sits at the intersection of domestic policy shifts, lingering external vulnerabilities, and an increasingly connected global capital market where sentiment moves fast. That does not mean the PSX cannot offer attractive returns. Rather, it implies that returns will be accompanied by higher realised volatility, and that success will depend on both macro stability and deepening of market structures.
Policymakers, regulators, and market participants all have a role to play: improving transparency, nurturing local institutional capacity, and upgrading infrastructure will be the difference between a market that remains chronically volatile and one that evolves into a resilient and investor-friendly marketplace.
THE WRITER IS A MEMBER OF PEC AND HOLDS A MASTER’S DEGREE IN ENGINEERING
New Delhi: Finance Minister Nirmala Sitharaman on Monday held first pre-budget consultations with leading economists ahead of the upcoming Union Budget 2026-27.
The meeting was attended by Chief Economic Adviser (CEA) V. Anantha Nageswaran, besides other economists and senior officers from the Department of Economic Affairs (DEA).
“Union Minister for Finance and Corporate Affairs @nsitharaman chairs the first Pre-Budget Consultation with leading economists in connection with the upcoming Union Budget 2026-27, in New Delhi, today,” said an X post from Ministry of Finance.
“The meeting was also attended by Secretary, Department of Economic Affairs (DEA) @FinMinIndia; and Chief Economic Adviser, Government of India, besides senior officers from the DEA,” the ministry added.
As part of the ongoing pre-budget consultations, the government has been holding a series of meetings with industry representatives to gather inputs for the upcoming Union Budget.
The discussions are centred on enhancing the ease of doing business and extending tax benefits to the last mile.
Late last month, senior officials from the PHD Chamber of Commerce and Industry (PHDCCI) on Wednesday met Revenue Secretary Arvind Srivastava to present the industry’s recommendations on direct and indirect tax policies.
PHDCCI CEO and Secretary General, Dr Ranjit Mehta, said the discussions focused on both taxation and business facilitation. “We also discussed ease of doing business, which is the government’s focus,” he noted, adding that the Chamber had shared specific suggestions to ease liquidity challenges faced by micro, small, and medium enterprises (MSMEs).
Meanwhile, the Confederation of Indian Industry (CII) has called for comprehensive tax reforms in the Union Budget 2026-27, including expedition of dispute resolution, simplification of TDS regime and digitised customs systems.
The apex industry body emphasised the need to move towards a “compliance system rooted in trust, simplicity, and technology,” and accountable for administrative delays.
CII Director-General Chandrajit Banerjee said that India’s tax system needs to shift from being dispute-driven to dispute-preventive. “The tax system must ensure that taxation not only raises revenue efficiently but also acts as a catalyst for investment, innovation and competitiveness. The Budget can be a pivot for a truly modern, transparent and globally benchmarked tax regime,” Banerjee said.
The government is expected to continue engaging with various industry bodies in the coming weeks before finalising its proposals for the Union Budget.
Business
FM Nirmala Sitharaman Chairs First Pre-Budget Talks With Economists For Union Budget 2026-27
Last Updated:
The meeting sees the participation of several eminent economists who shared their views and suggestions on the state of the economy and policy priorities for the next fiscal year.
Pre-Budget consultations are a crucial part of the budget-making process, allowing the government to take on board diverse perspectives from stakeholders across sectors before finalising the Union Budget.
Finance Minister Nirmala Sitharaman on Monday chaired the first pre-budget consultation with leading economists in connection with the upcoming Union Budget 2026-27, in New Delhi. The Budget 2026-27, which will be the ninth consecutive Budget to be presented by Sitharaman, will be tabled in Parliament on February 1. However, the official announcement is yet to be made.
The meeting saw the participation of several eminent economists who shared their views and suggestions on the state of the economy and policy priorities for the next fiscal year. The meeting was also attended by the Secretary, Department of Economic Affairs (DEA), the Chief Economic Adviser to the Government of India, and other senior officials from the Ministry of Finance.
Union Minister for Finance & Corporate Affairs Smt. @nsitharaman chairs the first Pre-Budget Consultation with leading economists in connection with the upcoming Union Budget 2026-27, in New Delhi, today.The meeting was also attended by Secretary, Department of Economic… pic.twitter.com/I9yn5FxpOD
— Ministry of Finance (@FinMinIndia) November 10, 2025
“Union Minister for Finance & Corporate Affairs Nirmala Sitharaman chairs the first Pre-Budget Consultation with leading economists in connection with the upcoming Union Budget 2026-27, in New Delhi, today. The meeting was also attended by secretary, Department of Economic Affairs (DEA), finance ministry; and chief economic adviser, Government of India, besides senior officers from the DEA,” the finance ministry said in a post on X on Monday, November 10, 2025.
Pre-Budget consultations are a crucial part of the budget-making process, allowing the government to take on board diverse perspectives from stakeholders across sectors before finalising the Union Budget.
The Indian economy gained momentum in the second quarter (July-September) of the current financial year Despite United States imposing higher tariffs on India in August, according to the finance ministry’s latest monthly economic review.
The report highlighted that against a global backdrop characterised by economic and trade policy uncertainty, India’s economy continued to strengthen in Q2 FY26.
It stated “this is particularly significant, as the United States imposed higher tariffs on India in August”.
This acceleration, despite external headwinds, highlights the resilience of the domestic economy and the effectiveness of ongoing structural reforms.
According to the monthly economic review, various supply-side high-frequency indicators (HFIs) displayed healthy trends, while demand conditions improved on the back of GST reforms and positive festive season sentiments, which spurred consumption.
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h…Read More
Haris is Deputy News Editor (Business) at news18.com. He writes on various issues related to personal finance, markets, economy and companies. Having over a decade of experience in financial journalism, Haris h… Read More
November 10, 2025, 11:38 IST
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Business
Stock market today: Nifty50 opens above 25,550; BSE Sensex up over 200 points – The Times of India
Stock market today: Nifty50 and BSE Sensex, the Indian equity benchmark indices, opened in green on Monday. While Nifty50 was above 25,550, BSE Sensex was up over 200 points. At 9:16 AM, Nifty50 was trading at 25,567.90, up 76 points or 0.30%. BSE Sensex was at 83,426.94, up 211 points or 0.25%.For the week ahead, market experts expect range-bound movement influenced by mixed global factors, while potential positive corporate earnings and developments in India-US trade discussions could provide support.Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited says, “The dominant trend in global trade this year has been the AI trade, which has pushed up AI stock valuations to elevated valuations, though not yet in bubble territory. The strong earnings growth in the US has been a fundamental support to this AI trade. Countries regarded as AI winners like China, South Korea and Taiwan also have benefited from this AI rally. Now, there are signs of this AI trade losing steam as evidenced by the 3 % decline in Nasdaq last week. This is a healthy trend. If this trend persists without high volatility, that would make the US market healthy, preempting a bubble formation and its eventual burst. Investors have to watch how this trend plays out.”“This emerging trend, it persists, would be particularly favourable for the Indian market which didn’t participate in the AI trade. FIIs, particularly the hedge funds, who have been consistently selling in India and taking money out for playing the AI trade, are now likely to pause and slowly reverse the AI trade in favour for non-AI trade in countries like India. Fortunately, the earnings growth currently happening in India and expected to gather momentum, going forward, can provide the fundamental support for a rally. Watch out for the leading names in banking and finance, telecom, capital goods, defence and automobiles.”Friday saw Nasdaq close slightly lower, marking its sharpest weekly fall since early April, as investors expressed concerns about sustainability of recent gains in artificial intelligence shares. US Treasury yields showed marginal decline.Asian trading witnessed a surge in US stock-index futures, as expectations grew for a resolution to the prolonged US government shutdown.Foreign portfolio investors conducted net sales of shares valued at Rs 4,581 crore on Thursday. In contrast, domestic institutional investors were net purchasers, investing Rs 6,675 crore.(Disclaimer: Recommendations and views on the stock market, other asset classes or personal finance management tips given by experts are their own. These opinions do not represent the views of The Times of India)
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