Weekly Report 13-17 July 26

Pakistan Stock Market Weekly Summary

Week 3 of July 2026 (13th July – 17th July 2026)

The Pakistan Stock Exchange (PSX) remained under significant selling pressure during the third week of July, with the KSE-100 Index declining by 6,439 points (-3.53%), closing at 175,803 from the previous week's close of 182,242. Since the market had reached 185,372 at the end of the first week of July, the index has now corrected by 9,569 points (-5.16%) over the past two weeks, reflecting a continuation of the broader market downtrend.

Market sentiment remained bearish, as investors continued profit-taking in heavyweight sectors while institutional selling and cautious participation kept overall trading activity under pressure. Although the market witnessed selective buying during the middle of the week, it was insufficient to reverse the prevailing negative trend.

Sector Performance

As Shaheer Innovation does not invest or operate in the Banking sector, our market analysis focuses exclusively on Shariah-compliant non-banking sectors.

During the week, Oil & Gas Exploration (E&P), Cement, Fertilizer, and Pharmaceutical companies remained the primary contributors to the market's decline as investors booked profits following previous gains and reacted to weaker market sentiment. However, despite the overall correction, Technology & Communication, Power, Textile, EMC (Various), and Automobile sectors demonstrated resilience by recording modest positive contributions, indicating selective accumulation by investors in fundamentally strong companies.

Challenges Affecting the Market

The broader market remained under pressure due to several key factors:

• Continued institutional and profit-taking activity across major sectors.

• Weakness in Oil & Gas Exploration (E&P) stocks following pressure on international oil prices.

• Declining momentum in the Cement sector amid slowing investor demand.

• Reduced overall trading participation during recovery sessions.

• Persistent cautious sentiment across the broader market.

Overall Market Analysis (Excluding Banking Sector)

Excluding the banking sector, the market remained in a corrective phase during the third week of July. Since the KSE-100 Index peaked at 185,372 during the first week of July, investors have increasingly shifted toward protecting profits, resulting in two consecutive weeks of market decline. This correction was largely driven by selling pressure in Oil & Gas E&P, Cement, Fertilizer, and Pharmaceutical stocks, all of which are significant components of the Shariah-compliant investment universe.

However, the selling pressure was not uniform across all sectors. Technology & Communication, Power, Textile, EMC (Various), and Automobile companies continued to attract selective buying, suggesting that investors are rotating capital into sectors with stronger earnings potential and more attractive valuations.

From a medium-term perspective, the current decline appears to represent a healthy market correction rather than a structural deterioration in fundamentals. The index has retraced approximately 5.16% from 185,372 to 175,803, bringing valuations closer to attractive levels for long-term investors. If selling pressure begins to ease and macroeconomic conditions stabilize, quality Shariah-compliant companies may offer favorable opportunities for gradual accumulation. Until then, market participants are likely to remain cautious, with selective stock picking expected to outperform broad market exposure.