Selling pressure returns to PSX as political, security concerns rattle investors

Market tumbles over 3,600 points after Monday’s rally

After a day of strong buying, the Pakistan Stock Exchange (PSX) witnessed a sharp reversal on Tuesday as heavy selling gripped the market amid heightened political uncertainty, security fears, and regional tensions.

The benchmark KSE-100 index plunged 3,667.90 points, or 2.27%, to close at 157,870.50. During the session, the index moved between an intra-day high of 161,516.75 and a low of 157,765.92, reflecting a volatile trading day dominated by risk aversion.

Investor confidence weakened after the Senate approved the 27th Constitutional Amendment with a two-thirds majority, raising political uncertainty. Reports of terrorist attacks in Islamabad and Wana further deepened investor unease, triggering broad-based selling across key sectors.

Selling pressure hit major segments including automobile assemblers, cement, commercial banks, oil and gas exploration, oil marketing companies (OMCs), power generation, and refineries. Index-heavy stocks such as Hub Power, Mari Energies, Oil and Gas Development Company (OGDCL), Pakistan Oilfields, Pakistan Petroleum, Pakistan State Oil (PSO), MCB Bank, Meezan Bank, and National Bank all closed in negative territory, dragging the overall index lower.

Equities Trader at KTrade Securities, Ahmed Sheraz, said the PSX faced a steep downturn on Tuesday as the KSE-100 index shed 3,667 points (-2.27%) day-on-day to settle at 157,870. He noted that the sell-off was broad-based, with major sectors including banking, oil and gas, cement, and fertilisers recording significant losses.

Read: PSX stages strong rally on positive macro triggers

“Market sentiment took a hit amid major terror incidents in Islamabad and Khyber Pakhtunkhwa, which led to loss of human lives,” Sheraz said. “Additionally, the possibility of Indian deceptive aggression along the border triggered widespread investor caution.”

He added that blue-chip stocks such as Engro, Oil and Gas Development Company, Hub Power, Fauji Fertiliser, Lucky Cement, Mari Energies, National Bank, and Pakistan Petroleum were among the major laggards, collectively contributing heavily to the day’s decline.

Looking ahead, Sheraz anticipated that investor sentiment would remain closely tied to developments on the law-and-order front and the political landscape, particularly the parliamentary approval of the 27th Constitutional Amendment, the release of the upcoming IMF tranche, and regional geopolitical dynamics.

Despite the market slump, overall trading activity rose, with volumes increasing to 836.4 million shares compared to Monday’s 783.2 million. The total value of shares traded during the session stood at Rs38 billion.

Out of 484 companies traded, 79 stocks closed higher, 364 declined, and 41 remained unchanged. First National Equities emerged as the volume leader, with 77.2 million shares changing hands, gaining Rs1.39 to close at Rs22.61.