Geopolitics sparks sell-off

KSE-100 tumbles 2,026 points in line with volatile global markets

KARACHI:

A sharp wave of selling swept through the Pakistan Stock Exchange (PSX) on Monday, triggering a steep corrective phase, as escalating geopolitical tensions drove investors into risk-off mode.

Heightened concerns over the Iran-US standoff, developments in Venezuela and instability in the Middle East and South Asia undermined market confidence, sending the benchmark KSE-100 index tumbling by over 2,000 points in line with volatility across global markets.

The trading session started under heavy pressure, with aggressive selling pushing the index lower immediately after the opening bell. Although bargain hunting sparked a temporary rebound in mid-session, lifting the index to the intra-day peak of 184,439, the recovery failed to gain traction.

As the day progressed, the sellers regained control, steadily dragging the market down and erasing all earlier advances. The index touched the intra-day low of 182,304 before stabilising slightly near close. The KSE-100 index wrapped up the session at 182,384.15, registering a steep loss of 2,025.52 points, or 1.10%.

KTrade Securities, in its market wrap, remarked that the PSX witnessed a corrective session, as heightened geopolitical tensions weighed on investor sentiment. Concerns surrounding the Iran-US situation, developments in Venezuela and broader instability across the Middle East and South Asia triggered risk-off behaviour, mirroring volatility seen across global markets.

As a result, the KSE-100 index closed at 182,384, down 2,026 points, as investors opted to lock in gains after the recent strong run-up. Despite the decline, activity remained elevated with volumes reaching 1.06 billion shares, indicating active repositioning rather than panic selling.

Profit-taking was observed across key sectors including commercial banks, oil and gas, investment companies and cement. Index-heavy names such as Systems Limited, UBL, Meezan Bank, Engro Holdings, Fauji Fertiliser, Lucky Cement and Hub Power remained under pressure and collectively dragged the benchmark index lower, KTrade said.

Arif Habib Limited (AHL) Deputy Head of Trading Ali Najib observed that the PSX commenced the week on a negative note as the KSE-100 extended its losses, closing at 182,384, down 2,026 points. Market sentiment remained weak amid rising geopolitical uncertainty, particularly in the Middle East. The exchange of aggressive diplomatic statements kept investors cautious and risk-averse throughout the session.

On the corporate front, Nishat Chunian Power (+10%) and Nishat Power (+10%) hit their upper caps after NexGen Auto (a unit of the Nishat group) introduced Jaecoo J5 HEV in Pakistan over the weekend at a price point that undercuts competing models, he mentioned.

Heavyweight stocks faced notable selling pressure, with Systems Limited, UBL, Meezan Bank, Engro Holdings and Fauji Fertiliser collectively shedding 783 points from the index. In contrast, PTCL, Nishat Mills, Askari Bank, Lotte Chemical and Millat Tractors provided partial support, adding 184 points.

Najib believes the market may consolidate for a few sessions within the 180-187k range amid rising geopolitical uncertainty. However, any pullback should offer an opportunity to strengthen positions, as the market continues to be fundamentally well supported.