The Pakistan Stock Exchange (PSX) came under sustained pressure during the outgoing week, shedding 2.9%, or nearly 5,110 points, to close at 168,062 amid geopolitical tensions, cross-border security concerns and cautious investor sentiment.

The decline coincided with the arrival of an International Monetary Fund (IMF) mission for the third review of Pakistan's $7 billion Extended Fund Facility and the Resilience and Sustainability Facility assessment, keeping market participants focused on external financing prospects and macro-stability signals.

On a day-on-day basis, the PSX commenced the week on a distinctly negative note, with the benchmark KSE-100 index closing at 167,691, down 5,479 points (-3.16%), marking the fourth-largest single-day decline in history.

On Tuesday, the bourse witnessed another highly volatile session as the index extended its corrective phase, reflecting persistent fragility in investor sentiment. The benchmark plunged to the intra-day low of 163,908 amid continued selling pressure before selective buying emerged, lifting the index to 166,259 at close, down 1,433 points (-0.85%).

The market experienced another volatile session on Wednesday as bearish pressure ultimately outweighed intermittent buying interest. The KSE-100 closed at 164,626, lower by 1,632 points (-0.98%). The PSX witnessed a strong recovery on Thursday, with the benchmark index gaining 4,267 points (+2.59%) to close at 168,893.90. The market ended the week with a range-bound, yet volatile session and the index settled at 168,062, down 831 points (-0.49%).

Arif Habib Limited (AHL) noted that the KSE-100 faced a sharp sell-off during the week, closing at 168,062 points, down 2.9% week-on-week (5,108 points), amid persistent selling pressure, heightened geopolitical concerns and cross-border tensions.

An IMF delegation has arrived to conduct the third review under the $7 billion Extended Fund Facility (EFF) and the second review under the Resilience and Sustainability Facility (RSF).

During the week up to February 26, 69 companies, representing 83% of the KSE-100's market capitalisation, announced their 2025 results, where their combined profit amounted to Rs1.6 trillion, reflecting a 5.9% year-on-year growth. Major contributors to the profitability were sectors such as investment banking, auto assemblers, miscellaneous and textiles, boasting a YoY growth of 50%, 44%, 36% and 31%, respectively, AHL said.

Gas production was down 4.4% WoW to 2,688 million cubic feet per day (mmcfd), whereas oil production was down 3% WoW to 60,888 barrels per day (bpd). The State Bank's liquid foreign exchange reserves stood at $16.2 billion, reflecting an increase of $16 million. Meanwhile, the Pakistani rupee remained largely stable against the US dollar, marginally strengthening to close at Rs279.47/$, AHL added.

Wadee Zaman of JS Global said that the KSE-100 declined again during the outgoing week amid rising geopolitical tensions and domestic security concerns, falling 5,108 points (2.9%) WoW, bringing the cumulative decline since its Jan'26 peak to 11.2% from 189,167 points. The index staged a partial recovery towards the weekend on reports of constructive progress in Iran-US negotiations, with further talks scheduled in Vienna next week.

On the macro front, the IMF mission has arrived for the third review of the EFF, under which discussions are set to commence next week. The fund acknowledged Pakistan's policy stabilisation efforts but reportedly flagged risks around securing the one-year rollover of $2 billion UAE deposits. The finance minister expressed confidence, citing an existing short-term arrangement and ongoing talks for a longer-term extension, Zaman said.

Separately, Pakistan's planned $250 million Panda bond issuance has been delayed due to its weak credit profile, limiting direct access to Chinese debt markets. The SBP's latest data showed that profit repatriation increased by 26% to $1.7 billion while foreign direct investment declined 41% in 7MFY26. In another major development, according to the power minister, Pakistan expects to complete its first 200-megawatt electricity transaction under a competitive wheeling auction by June 2026, Zaman added.