PSX edges lower amid policy rate concern

KSE-100 index sheds 579 points as investor caution erases early gains

KARACHI:

In a trading session marked by a mix of concern and optimism, the Pakistan Stock Exchange (PSX) on Monday registered a modest decline of 579 points as investors anxiously awaited the monetary policy announcement by the State Bank of Pakistan (SBP).

In the morning, the market got off to a bullish start, which quickly took the benchmark KSE-100 index to the intra-day peak of 191,033. Immediately afterwards, the market lost all gains to selling pressure and remained range bound for most of the day. Towards close, the index touched the intra-day low of 188,268.

Sentiment remained subdued as participants closely monitored signals from the central bank, particularly the policy rate decision and future monetary direction. Later in the afternoon, the SBP left the rate on hold at 10.5%. Additionally, geopolitical concerns over the Iran-US standoff prompted investors to adopt a defensive, risk-averse stance.

KTrade Securities equity trader Ahmed Sheraz observed that the PSX ended Monday's session in the red, with the KSE-100 index settling at 188,588, down 579 points, or 0.31%. The market remained largely range bound as investors were wary ahead of the Monetary Policy Committee (MPC) decision. While expectations were tilted towards a 50 to 75-basis-point rate cut, uncertainty about the final decision kept risk appetite in check, he said.

Sentiment was further dampened by geopolitical tensions, particularly surrounding the Iran-US situation, which encouraged a broader risk-off approach. Adding to the pressure, the ongoing futures rollover also weighed on the market, he noted.

During the day, Sazgar Engineering touched its upper limit over TANK 500 bookings while Systems Limited, Millat Tractors, Javedan Corporation, Fauji Foods and UBL also notched up gains.

On the flip side, Meezan Bank, Engro Holdings, Pioneer Cement, Fatima Fertiliser, Lucky Cement and Hub Power emerged as major laggards. Automobile and technology sectors showed relative resilience, whereas oil & gas, cement and commercial banks remained under pressure, added Sheraz.

JS Global analyst Nawaz Ali commented that the PSX saw subdued activity as investors remained cautious and booked profits amid the futures rollover week and geopolitical tensions. Intra-day support from index heavyweight Fauji Fertiliser, which gained Rs34.18 at its peak, helped keep the index positive for most of the session.

However, selling at higher levels erased gains by the close, Ali said and recommended investors to adopt a wait-and-see approach, with a focus on fundamentally strong stocks where dips may offer buying opportunities.

Arif Habib Limited Deputy Head of Trading Ali Najib said that the benchmark index moved in both directions in a range-bound session, touching the intra-day high of 191,033 (+0.99%) and low of 188,268 (-0.47%), as investors opted to trim positions at higher levels ahead of the monetary policy announcement.

Going forward, Najib believes the market may face near-term selling pressure following the monetary policy status quo, which came as a negative surprise. However, the 185k level is expected to provide the first key support.

Topline Securities wrote in its review that the bourse experienced a volatile session as the benchmark index opened on a positive note, rallying to the intra-day high of 1,865 points. However, sentiment turned cautious in the second half, with investors opting to lock in profits, pulling the index down to the intra-day low of 898 points. The market closed at 188,588, down 579 points.

The choppy trading pattern was largely driven by investor caution ahead of MPC meeting later in the day, which kept market participants on the sidelines, it said. In corporate news, Mari Energies announced its 1HFY26 results, reporting earnings per share of Rs23.89, which was below expectations due to higher-than-anticipated operating and exploration costs. The company declared an interim dividend of Rs8.3/share for 2QFY26.

Overall trading volumes decreased to 870.4 million shares versus previous tally of 877.6 million. The value of shares traded during the day stood at Rs57.2 billion.

Shares of 487 companies were traded. Of these, 143 stocks closed higher, 298 fell and 46 remained unchanged.

K-Electric topped the volumes chart with trading in 172.8 million shares, rising Rs0.23 to close at Rs6.97. It was followed by WorldCall Telecom with 37.1 million shares, losing Rs0.04 to close at Rs1.71 and Pakistan International Bulk Terminal with 29 million shares, falling Rs0.7 to close at Rs20.90. Foreign investors bought shares worth Rs1.7 billion, the National Clearing Company reported.