Geopolitical Tensions Drive PSX Sell‑Off

Geopolitical tensions and climbing global oil prices sparked a fresh sell‑off on the Pakistan Stock Exchange (PSX) on Wednesday, as investors grew cautious and trimmed exposure amid uncertainty surrounding the US‑Iran conflict.

The benchmark KSE‑100 index briefly rose but could not sustain its early gains, closing at 174,429.93, down 1,703.64 points (0.97%). After opening with a modest uptick of 14.07 points at 9:39 am, the market reversed, falling to an intraday high of 176,255.64 before dropping to a low of 174,104.07.

Nawaz Ali of JS Global noted that bearish sentiment prevailed at the PSX, prompting investors to lock in profits or stay on the sidelines amid heightened geopolitical tensions. The KSE‑100 settled at 174,430, down 1,704 points. Escalating uncertainty around the US‑Iran conflict lifted international crude‑oil prices, raising concerns about the impact on Pakistan’s import‑dependent economy. He added, “We advise investors to adopt a buy‑on‑dips approach, as any de‑escalation could restore confidence.”

“The market stayed under pressure as Brent crude hovered near $96 per barrel amid rising Middle‑East tensions. Concerns over the Strait of Hormuz and growing fears about the Bab el‑Mandeb corridor further dampened investor sentiment and muted risk appetite,” said Ahmed Sheraz of KASB KTrade.

Sectorally, commercial banks, cement producers, and fertiliser firms led the decline, with UBL, Fauji Fertiliser, Engro Holdings, Hub Power, and Lucky Cement among the biggest drags. Trading activity on the KSE‑100 remained muted, with roughly 266 million shares changing hands.

UBL reported robust quarterly results, posting earnings per share of approximately Rs15 and a cash dividend of Rs8 per share. The bank also recorded a 13% increase in deposits, underscoring the strength of its core operations and earnings momentum. “Looking ahead, market performance will be largely influenced by geopolitical developments and oil‑price movements,” Sheraz remarked.

Ali Najib of Arif Habib Limited observed that investor interest stayed subdued throughout the session as the US and Iran exchanged fresh strikes. The heightened uncertainty pushed international oil prices higher, with WTI and Brent crude climbing to $88.61 and $95.47 per barrel respectively, further weighing on market sentiment.

Rising global oil prices have revived concerns about Pakistan’s external account, given the nation’s dependence on imported energy. Sustained high crude prices could expand the import bill and strain external balances.

At the PSX, commercial‑bank, cement, and fertiliser stocks came under pressure. The banking sector remained in focus after UBL posted profit after tax of Rs37.4 billion for the second quarter of 2026, with earnings per share of Rs14.97 — a 31% year‑on‑year increase. The bank also announced a cash dividend of Rs8 per share, bringing the first‑half payout to Rs16.

On the macroeconomic front, Pakistan received a positive signal as S&P upgraded its sovereign credit rating to “B” from “B‑”, maintaining a stable outlook. The upgrade reflected progress on IMF‑backed reforms, improved fiscal metrics and stronger external buffers. However, Najib noted that the rating upgrade could not immediately offset the impact of geopolitical uncertainty on market sentiment.

Overall trading volume fell to 695.7 million shares, down from the previous 1 billion shares, with traded share value amounting to Rs25.4 billion.

A total of 493 companies were traded, with 108 closing higher, 353 lower, and 32 unchanged.

Trust Brokerage was the volume leader, trading 134.2 million shares, edging up Rs0.02 to close at Rs2.41. The National Clearing Company reported that foreign investors sold shares worth Rs5.99 million.

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