PSX slides as oil price spikes and Middle East supply concerns weigh on market

Investor confidence slipped at the Pakistan Stock Exchange (PSX) on Wednesday as the KSE‑100 index opened lower and stayed in negative territory, with selling pressure spreading across major sectors amid rising oil prices and supply disruptions in the Middle East.

The benchmark index fell 1,370.52 points, or 0.81%, to close at 168,021.80. It traded between a high of 169,382.01 and a low of 167,849.70 during the session. Automobile assemblers, cement firms, commercial banks, oil‑and‑gas exploration companies and oil marketing firms were among the sectors under pressure.

Global oil prices pulled back after a two‑day rally, following an unexpectedly large increase in U.S. crude inventories, while ongoing supply disruptions in the Gulf continued to weigh on Asian markets.

“Selling pressure persisted at the PSX, with the benchmark KSE‑100 index declining 1,371 points,” said JS Global analyst Mubashir Anis Naviwala. The index stayed under pressure after a weak opening, dropping to an intra‑day low of 167,850 before modestly recovering.

Commercial banks, fertiliser and cement stocks were the primary sources of pressure. The oil & gas, technology and power generation sectors also dragged the index lower. Trading activity stayed subdued as caution prevailed amid market uncertainty, though selective buying offered some support, Naviwala added.

Ahmed Sheraz, an equity trader at KTrade Securities, noted that the KSE‑100 closed down 1,371 points, or 0.81%, as selling pressure remained dominant across the market. The decline was broad‑based, led by commercial banks, fertiliser and cement stocks. Fauji Fertiliser, NBP, Engro Holdings, HBL, Lucky Cement and Bank Alfalah were among the major contributors to the downturn. Although the State Bank of Pakistan (SBP) kept the policy rate unchanged at 11.50%, persistent external and inflationary pressures continued to dampen investor sentiment.

International oil prices remained high, with Brent hovering around $108 per barrel and briefly breaching $109. “Until there is greater clarity on the Strait of Hormuz and Red Sea shipping routes, sustained market strength is likely to be a challenge,” Sheraz said. “With high oil prices adding to inflationary and macroeconomic risks, a cautious approach is increasingly likely in the near term.”

Ali Najib, Arif Habib Limited’s (AHL) Deputy Head of Trading, said investors remained cautious amid the escalating U.S.–Iran conflict and shipping disruptions through the Strait of Hormuz. Oil traded above $104 per barrel, raising concerns about higher domestic fuel prices, renewed inflationary pressures, a widening import bill and potential implications for monetary policy.

Millat Tractors reported FY26 earnings per share of Rs19.65, a 23% rise from Rs15.97 a year ago, and declared a cash dividend of Rs11 per share, bringing the FY26 cumulative payout to Rs21 per share. The top laggards—Fauji Fertiliser, NBP, Engro Holdings, HBL, Lucky Cement, Bank Alfalah, Pakistan Petroleum, Millat Tractors, PTCL and Mari Energies—collectively dragged the index down by 932 points.

“Going forward, market activity is expected to remain volatile, with selective profit‑taking and stock‑specific moves amid the ongoing earnings season. Geopolitical developments and elevated oil prices will remain the key catalysts,” Najib said.

Overall trading volumes fell to 356.1 million shares compared with 372 million a day earlier, while the value of traded shares stood at Rs19.5 billion. WorldCall Telecom led volume with 40 million shares traded, losing Rs0.04 to close at Rs1.02. Foreign investors sold shares worth Rs306 million.

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