PSX tumbles over political, security worries

Following a robust rally a day ago, the Pakistan Stock Exchange (PSX) saw a sharp reversal on Tuesday as heavy selling pulled the benchmark KSE-100 index down by 3,668 points.

Investors turned cautious amid political uncertainty after the approval of 27th Constitutional Amendment by the Senate with a two-thirds majority. In addition, reports of terrorist attacks added to investor unease, leading to broad-based offloading across key sectors.

During the session, the index moved between the intra-day high of 161,517 and low of 157,766, before closing at 157,870.50. Auto assemblers, cement, commercial banks, oil and gas exploration, oil marketing companies, power generation and refineries were the main sectors that faced selling bouts.

KTrade Securities equities trader Ahmed Sheraz commented that PSX witnessed a steep downturn on Tuesday as the KSE-100 index plunged 3,668 points. The sell-off was broad-based, with major sectors like banking, oil and gas, cement and fertiliser suffering notable losses.

Market sentiment took a hit from terror incidents in Islamabad and Khyber-Pakhtunkhwa, leading to loss of human lives. Also, fears of potential tension on the Indian border sparked caution, he said.

The selling spree was observed in blue-chip stocks including Engro, Oil & Gas Development Company, Hub Power, Fauji Fertiliser, Lucky Cement, Mari Energies, National Bank and Pakistan Petroleum, which primarily contributed to the market's decline. Arif Habib Limited (AHL) noted that a damaging session took the KSE-100 index down to the bottom of the 157k-170k range following blasts in India and Islamabad. Only four shares rose while 94 fell with Kot Addu Power (+1%), Bank AL Habib (+0.09%) and Mahmood Textile Mills (+0.6%) among the gainers. On the flip side, Engro Holdings (-3.58%), OGDC (-3.74%) and Hub Power (-2.93%) were the biggest index drags.

With the potential for increase in tensions between Pakistan and India, the PSX may again see elevated risks of a downside, AHL cautioned. JS Global analyst Muhammad Hasan Ather wrote that the KSE-100 index tumbled on Tuesday, marking one of the steepest declines in recent sessions. The sell-off was fuelled by renewed security concerns amid geopolitical conflicts and heightened political uncertainty after the proposed constitutional amendment.

Overall trading volumes increased to 836.4 million shares against Monday's tally of 783.3 million. The value of traded stocks stood at Rs38.1 billion.

Shares of 484 companies were traded. Of these, 79 stocks closed higher, 364 declined and 41 remained unchanged.

First National Equities was the volume leader with trading in 77.2 million shares, gaining Rs1.39 to close at Rs22.61. It was followed by K-Electric with 66.9 million shares, falling Rs0.22 to close at Rs5.12 and WorldCall Telecom with 46.8 million shares, losing Rs0.07 to close at Rs1.70. Foreign investors were net sellers of shares worth Rs198 million, according to NCCPL.