Pakistan Stock Exchange Slips 495 Points Amid Heightened US-Iran Geopolitical Tensions

The KSE-100 Index retreated on Thursday, closing down 495 points at the 175,547 level. This represents a daily decline of 0.28%. Trading activity was relatively quiet, with total volumes reaching 222 million shares. According to Ahmed Sheraz of KASB KTrade, the highest trading volumes were recorded in PIBTL (32 million shares), CNERGY (28 million shares), and KEL (19 million shares).

Market volatility persisted as investors maintained a cautious stance due to escalating geopolitical uncertainties. Sector-wise, the oil & gas, cement, and investment banking sectors experienced significant losses, while the fertilizer and commercial banking sectors acted as a buffer for the index.

Key downward pressures were exerted by ENGROH, LUCK, SYS, HUBC, and PPL. Conversely, FFC, UBL, EFERT, and MEBL were the primary drivers of positive movement. Market sentiment was heavily impacted by reports of US strikes in Iran, which initially drove Brent crude prices toward US$93/bbl before it settled back to approximately US$90/bbl later in the session.

Continued geopolitical instability and rising oil prices are expected to sustain volatility across global and regional equity markets. This trend was reflected in the PSX’s performance, following a downward close in US markets and mixed-to-negative movement across Asian markets overnight.

In corporate news, Bank Alfalah (BAFL) delivered stronger-than-expected 2QCY26 results, reporting an EPS of PKR 3.23, bolstered by significant growth in non-funded income. The bank also declared a cash dividend of PKR 1.5 per share, and noted a 7.5% quarter-on-quarter increase in deposits, contributing to overall positive sentiment within the banking sector.

Moving forward, market participants are expected to focus on geopolitical shifts and the ongoing corporate earnings season. While Middle East tensions may cause short-term volatility, strong corporate earnings performance may provide the necessary support to stabilize market sentiment.

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