Karachi: The stock market experienced a bearish week, with the benchmark KSE-100 index closing at 120,023 points, marking a decrease of 2,120 points or 1.74% week-on-week. Investor confidence was affected by geopolitical issues, leading to a 9.4% week-on-week decline in average daily trading volume to 822 million shares.

The week began with the Monetary Policy Committee maintaining its current stance, aligning with market expectations. Macroeconomic data released included a current account deficit of $103 million for May 2025 and net foreign direct investment of $194 million for the same month. Auctions saw a reduction in Pakistan Investment Bonds cut-off yields, contrasted by an increase in T-bill cut-off yields. Additionally, the State Bank of Pakistan's foreign exchange reserves rose by $46 million, totaling $11.7 billion as of June 6.

The Pakistani rupee depreciated by 0.26% against the U.S. dollar, closing at 283.7 PKR/USD. Major developments included a 2.3% year-on-year surge in the Large Scale Manufacturing index for May 2025 and a 19% year-on-year increase in IT exports, reaching $3.5 billion for the first 11 months of FY25.

Sector-wise, Woollen, Jute, Modarabas, Close-end mutual funds, and Transport were top performers, while Power, Engineering, Investment Banks/Companies, Glass and Ceramics, and Tobacco sectors saw declines. Mutual Funds and Insurance companies led in net selling, while individuals absorbed the majority of selling activity.

Looking ahead, the market's short-term performance may be influenced by regional conflicts involving Iran and Israel. However, a positive outlook is expected for the medium term, with the KSE-100 index projected to reach 165,215 points by December 2025. This optimism is supported by strong earnings in fertilizers, stable returns on equity in banks, and improving cash flows in exploration and production as well as oil marketing companies.