By Moaaz Manzoor

The Pakistan Stock Exchange (PSX) witnessed a sharp bearish week as escalating geopolitical tensions related to the ongoing US–Iran conflict dampened investor sentiment, triggering heavy selling pressure across key sectors and dragging the benchmark index significantly lower, reports WealthPakistan.

The KSE-100 Index closed at 157,496 points, down 6.3% week-on-week, shedding 10,566 points during the week, according to Arif Habib Limited (AHL). The persistent risk-off sentiment reflected investor caution amid growing uncertainty in global markets and concerns about potential spillovers from geopolitical developments.

According to AHL, sector-wise negative contributions were led by banks, which erased 3,916 points from the index, followed by cement with a decline of 1,511 points, fertilizer with 959 points, technology with 643 points and investment banks with 584 points.

Only a few sectors provided limited support to the market. The refinery sector contributed 34 points, followed by exploration and production companies with six points and the sugar sector with two points.

On a scrip-wise basis, the largest drags on the index were UBL, which wiped out 1,141 points, followed by HBL with 638 points, FFC with 632 points, LUCK with 584 points and ENGROH with 525 points.

Meanwhile, positive contributions came from a small number of stocks. MARI added 98 points, ATRL contributed 52 points, POL added 29 points, KEL contributed 14 points and DHPL added five points.

Market participation showed some improvement during the week despite the bearish trend. Average daily volumes increased 9.8% week-on-week to 658 million shares, while the average traded value rose 18% WoW to $130 million, reflecting selective activity in the market.

Commenting on the market performance, Ali Najib, Deputy Head of Trading at Arif Habib Limited, said the PSX closed the week on a cautious note, with the KSE-100 Index falling 3,715 points, or 2.30%, in the final session to settle at 157,496 as investors adopted a defensive stance amid concerns over escalation in the US–Iran conflict.

He said a survey conducted by Arif Habib Limited suggests the State Bank of Pakistan is expected to maintain the policy rate at 10.5% in the upcoming monetary policy meeting.

On the corporate side, Sazgar Engineering Works Limited reported February 2026 Haval (four-wheeler) sales of 1,682 units, reflecting a 91% year-on-year increase, while three-wheeler sales rose 2% YoY to 2,704 units.

Meanwhile, UBL, ENGROH, LUCK, HUBC, FFC, MEBL, SYS, OGDC, EFERT and PPL were the major drags on the index during the session, collectively erasing 2,162 points.

Looking ahead, AHL noted that the direction of the KSE-100 Index next week will depend on developments on the geopolitical front as well as the outcome of the upcoming Monetary Policy Committee meeting. The index is currently trading at a price-to-earnings ratio of 8.1x, offering a dividend yield of approximately 6.3%.

AKD Securities said market sentiment will remain linked to developments in the Middle East conflict, the ongoing IMF review and the SBP’s upcoming monetary policy decision. The brokerage noted that the KSE-100 Index is currently trading at a forward price-to-earnings ratio of 6.9x.

Credit: INP-WealthPk