Middle East Instability and Rising Oil Prices Drive PSX Downward

The Pakistan Stock Exchange (PSX) closed lower on Wednesday, as escalating tensions in the Middle East and surging oil prices dampened investor confidence. The KSE-100 index shed 903.12 points, finishing the session at 169,427.44.

KARACHI: Fresh selling pressure gripped the Pakistan Stock Exchange on Wednesday, leading the benchmark KSE-100 index to drop 903.12 points. The decline was primarily driven by profit-taking amid a deteriorating geopolitical climate in the Middle East and rising global oil prices.

The index was unable to sustain its overnight gains above the 170,000-point threshold, ultimately closing down 0.53 per cent at 169,427.44. Trading was characterized by high volatility, with the index swinging between an intraday high of 399 points and a low of 984 points, reflecting a climate of deep uncertainty.

Market Volatility Persists

Despite several attempts to recover throughout the session, selling pressure across key sectors kept the market strained. The wide intraday fluctuations highlighted a struggle between cautious optimism and prevailing concerns as investors adjusted their positions in anticipation of key macroeconomic triggers.

Regarding index contributions, Meezan Bank, International Steels Ltd, Pakistan Oilfield, International Industries Ltd, and Interloop Ltd provided a combined boost of 183 points. Conversely, Bank Al-Habib, United Bank, MCB Bank, Engro Holdings, and the Oil and Gas Development Company collectively pulled the index down by 464 points.

Geopolitical Tensions Dampen Sentiment

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, noted that trading activity remained mixed as confidence wavered following renewed tensions between the United States and Iran. He explained that geopolitical instability has left market momentum fragile, prompting many investors to adopt a cautious approach and remain on the sidelines.

Market analysts identified these geopolitical developments as the primary driver of the current trend. They suggested that investor sentiment will likely remain guarded until there is greater clarity regarding the US-Iran situation, with future market direction heavily dependent on regional stability and risk assessments.

Remittances Bolster Macroeconomic Position

On the macroeconomic front, Pakistan’s external account received a boost as workers’ remittances rose 15 per cent year-on-year and 20 per cent month-on-month, reaching $4.3 billion in May. For the first 11 months of FY26, cumulative remittances grew by 9 per cent to $38.1 billion.

Market participation remained robust, with trading volume increasing 3.15 per cent to 791.6 million shares. However, turnover saw a decline of 6.22 per cent, falling to Rs25.4 billion. TPL Properties emerged as the most active stock, leading the volume chart with 64 million shares traded.

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