PSX Declines 699 Points Amidst Escalating Middle East Conflict

The Pakistan Stock Exchange building in Karachi, Pakistan, on January 11, 2016. (Photo: Reuters)

KARACHI:

The Pakistan Stock Exchange (PSX) saw significant investor anxiety on Wednesday, driven by the spreading conflict in the Middle East, which led the KSE-100 index to drop by 698.56 points, or 0.40%, to close at 171,943.60.

The market fluctuated within a wide range, reaching an intra-day high of 173,174.19 before dipping to a low of 171,801.67. Selling pressure intensified in the final hours, pushing the index further into negative territory.

Market sentiment was heavily influenced by the ongoing US-Iran tensions, with escalating attacks on military, shipping, and energy assets raising concerns about broader regional instability and a potential spike in crude oil prices. Investors remained cautious about the possible economic impacts of energy supply disruptions.

According to Ahmed Sheraz, an equity trader at KTrade Securities, the KSE-100 index closed down 698.56 points, or 0.40%, with trading volume reaching approximately 159 million shares.

The trading session was mixed, with notable selling pressure in the commercial bank, cement, and fertiliser sectors. Key stocks like Fauji Fertiliser, MCB Bank, Lucky Cement, and Meezan Bank declined, while selective buying in other areas provided some support to the broader market.

Looking ahead, investors are expected to maintain a cautious stance due to heightened geopolitical uncertainty. Brent crude oil surpassed $100 per barrel following overnight escalations between the US and Iran, and shipping through the Strait of Hormuz remained disrupted.

Sheraz noted that the sharp rise in oil prices, combined with ongoing tensions, could continue to affect Pakistan’s external account and inflation outlook, making the PSX sensitive to further developments.

JS Global analyst Mubashir Anis Naviwala observed that the KSE-100 index traded cautiously, hitting an intra-day low of 171,801.67. Selling pressure was evident towards the close, with commercial banks, cement, and fertiliser firms acting as major drags. Some support came from miscellaneous, chemical, and automobile sectors, but overall sentiment remained cautious amid renewed uncertainty.

Ali Najib, Deputy Head of Trading at Arif Habib Limited (AHL), commented that market sentiment stayed subdued following fresh attacks in the Middle East. International oil prices strengthened, with WTI at $94.97 (+1.9%) and Brent at $100.40 (+2.46%) in the evening.

On the macroeconomic front, Pakistan’s remittances grew 17% year-on-year to $3.7 billion in August, with two-month fiscal year 2027 inflows rising 15% to $7.3 billion. Stocks like Pakistan Services, UBL, Oil & Gas Development Company, Lucky Core, and Sazgar Engineering added 269 points to the index, while FFC, MCB Bank, Lucky Cement, Meezan Bank, and Mari Energies lost 411 points due to selective profit-taking.

Najib indicated that market activity might remain volatile due to expectations of profit-taking and stock-specific moves during the corporate result season, with geopolitical developments and oil prices as key drivers.

Overall, trading volumes decreased to 477.7 million shares from Tuesday’s 722.6 million, with the value of traded shares at Rs22.6 billion.

In the ready market, 492 companies were traded, with 162 closing higher, 293 falling, and 37 unchanged.

Cnergyico Pk led volumes with 65.8 million shares traded, closing at Rs13.06 after a loss of Rs0.26. Foreign investors bought shares worth Rs84.5 million, according to the National Clearing Company.

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