The Pakistan Stock Exchange (PSX) came under renewed selling pressure on Friday, extending its corrective streak as investors braced for next week’s key monetary policy announcement and futures roll-over. The benchmark KSE-100 Index slumped by 1,286 points, or 0.78%, to close the week at 163,304, marking another bearish session driven by profit-taking and defensive trading.

Market sentiment remained cautious throughout the day as participants opted to trim exposure and rebalance portfolios ahead of the Monetary Policy Committee (MPC) meeting, scheduled for Monday, October 27, 2025, according to Ali Najib, Deputy Head of Trading at Arif Habib Ltd. "Historically, both rollover week and policy meetings tend to heighten volatility, prompting traders to adopt a wait-and-watch strategy."

According to a survey by Arif Habib Ltd (AHL), the State Bank of Pakistan (SBP) is likely to keep the policy rate unchanged at 11%, citing recent inflationary upticks, a mild widening of the current account deficit, and the early stages of domestic economic recovery.

The banking sector led the decline, collectively knocking off 952 points from the index as heavyweights UBL, BAHL, MEBL, HBL, BOP, AKBL, BAFL, and NBP faced aggressive selling.

Despite the downtrend, overall market activity remained healthy, with 1.03 billion shares traded and a total value of Rs34.9 billion. K-Electric (KEL) topped the volume chart once again, posting 194.8 million shares.

Weekly Review:

On a week-on-week (WoW) basis, the benchmark index lost 502 points (-0.31%), having opened at 164,912, touched a high of 168,414, and dipped to a low of 163,042 before closing at 163,304.

Analysts suggest the market may remain in a short-term consolidation phase as investors await clearer macroeconomic signals. The 160,000-point level is expected to act as a crucial support zone, while the 165,000 mark could cap near-term upside potential. Stability around these levels may attract fresh buying interest once monetary clarity emerges.