Pakistan Stock Market Weekly Summary

Week 4 of July 2026 (20th July – 26th July 2026)

The Pakistan Stock Exchange (PSX) remained under pressure for the fourth consecutive week, with the KSE-100 Index declining by 1,564 points (-1.54%) to close at 174,364, compared to the previous week's close of 175,928. Since the market peaked at 185,372 during the first week of July, the index has now corrected by 11,008 points (-5.94%), reflecting a prolonged consolidation driven by persistent selling pressure and cautious investor sentiment.

Although the pace of the decline slowed compared to previous weeks, investors remained selective, with buying interest emerging only in a few defensive and fundamentally strong sectors. The overall market sentiment continued to remain bearish, while trading activity indicated that investors were waiting for stronger economic and corporate catalysts before increasing exposure.

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, Power, Technology & Communication, Cement, and Pharmaceutical companies demonstrated relative resilience and continued to attract selective buying, reflecting investor confidence in fundamentally strong businesses despite the broader market weakness. Conversely, Oil & Gas Exploration (E&P), Fertilizer, Cement (Allied), Oil Marketing Companies (OMCs), and Auto Parts remained under significant selling pressure, primarily due to weaker global commodity prices, profit-taking, and cautious market sentiment.

Challenges Affecting the Market

The market remained under pressure due to several macroeconomic and sector-specific concerns:

• Rising geopolitical tensions and regional uncertainty.

• Continued uncertainty surrounding the IMF review and fiscal policies.

• High interest rates limiting economic activity and corporate expansion.

• Weak corporate earnings expectations in cyclical industries.

• Persistent selling pressure in Oil & Gas E&P, Fertilizer, Cement-related companies, and OMCs.

Overall Market Analysis (Excluding Banking Sector)

Excluding the banking sector, the market remained in a corrective phase during the fourth week of July. Since the KSE-100 Index reached 185,372 in the first week of July, the market has undergone a 5.94% correction, bringing the index down to 174,364. This decline has largely been driven by sustained selling pressure in Oil & Gas E&P, Fertilizer, Cement-related companies, and Oil Marketing Companies, which together account for a significant portion of the Shariah-compliant investment universe.

Despite the broader weakness, the market has shown encouraging signs of selective accumulation. Power, Technology & Communication, Cement, and Pharmaceutical stocks continued to attract buying interest at lower levels, suggesting that long-term investors are gradually identifying value opportunities in fundamentally strong businesses.

The moderation in weekly losses compared with previous weeks indicates that selling pressure may be beginning to ease. While investor sentiment remains cautious, improving valuations across many quality non-banking companies could provide an attractive entry point for long-term investors. Going forward, a recovery in macroeconomic confidence, stronger corporate earnings, and improved market liquidity will be key factors in determining whether the current correction transitions into a sustained market recovery.