Karachi: The KSE-100 Index experienced a lackluster performance throughout February, closing with a marginal month-over-month decline of 0.9 percent. Trading activity on the Pakistan Stock Exchange (PSX) decreased by 24 percent, with foreign investors being net sellers, partially offset by insurance companies and mutual funds.

According to a statement by JS Global, the index moved within a narrow range due to the absence of significant catalysts and mixed corporate earnings announcements. The market remained range-bound as key macroeconomic indicators showed little change.

The MSCI quarterly review had minor effects on the PSX, with two stocks, ABOT and SEARLE, added to the MSCI Frontier Markets Index. This brought the total number of Pakistani stocks in the MSCI FM, including small caps, to 89.

Oil prices also declined by approximately 5 percent month-over-month, reaching a two-month low of $70 per barrel due to a weak demand outlook. This was influenced by economic data from the United States and Germany, alongside potential increases in output by various countries.

Corporate announcements revealed a mixed performance, with some sectors like cement and auto exceeding expectations. However, the banking sector faced challenges due to a decline in net interest margins, and FFC reported weaker earnings but maintained its payout.

Key macroeconomic indicators remained stable, with inflation below 3 percent and foreign reserves at $11.2 billion. However, the current account balance posted a deficit in January 2025 due to a higher trade deficit, despite increased remittances.

Looking ahead, the market's focus is on the upcoming IMF review, which may lead to the release of a $1 billion tranche under the Extended Fund Facility. Additionally, a potential rate cut and recovery in domestic demand for construction materials and consumer goods are anticipated in the coming months.