Stocks in free fall amid panic selling

Index tumbles nearly 5,500 points on geopolitical worries, caution ahead of IMF review

KARACHI:

Heavy selling marked trading at the Pakistan Stock Exchange (PSX) on Monday as the benchmark KSE-100 index gave up early gains and plunged nearly 5,500 points in panic selling over geopolitical tensions and domestic political and economic uncertainty.

In the morning, the market opened on a relatively firm note, with the index climbing to the intra-day high of 174,337 during early trading. However, the positive momentum proved short-lived and profit-taking emerged at higher levels, pushing the index on a steady downward trajectory.

Market confidence got a hit as investors grappled with geopolitical worries, ambiguity ahead of the upcoming IMF review and an uneven outlook tied to the ongoing corporate earnings cycle.

As the session progressed, selling pressure intensified across key index-heavy sectors. The market continued to drift lower through midday, reflecting cautious positioning and a lack of buying interest. In the final trading hour, it experienced accelerated selling, which pushed the index to the intra-day low of 166,887. At close, the PSX recorded a plunge of 5,478.63 points, or 3.16%, and settled at 167,691.08.

"Even though some geopolitical tensions have eased, risk appetite remains fragile. Markets are still pricing in uncertainty. Investors don't wait for inflation prints, trade disruptions or macro data to confirm the damage, they sell on heightened geopolitical risk, uncertainty and risk-off flows," commented JS Global Head of Research Waqas Ghani.

Topline Securities wrote in its review that the KSE-100 index concluded Monday's session at 167,691, registering a decline of 5,479 points amid persistent volatility. During the day, the index fluctuated between 174,337 and 166,887, largely influenced by rollover week dynamics.

Index-heavy constituents including Fauji Fertiliser Company, Lucky Cement, Engro Holdings, National Bank of Pakistan and Habib Bank Limited emerged as the principal laggards, collectively dragging the benchmark down by 1,797 points, Topline said.

KTrade Securities observed that the KSE-100 witnessed a sharp bearish session, diving 5,479 points (-3.16%). The market remained under pressure throughout the session and at one point was down more than 6,000 points, reflecting broad-based panic selling.

Selling pressure was visible across banking, cement, exploration & production and technology sectors, which kept sentiment weak. Major laggards included Lucky Cement, Fauji Fertiliser, Hub Power, Systems Limited, MCB Bank and Oil & Gas Development Company. On the results front, OGDC announced a strong payout of Rs4.25 per share, while DG Khan Cement also posted a solid result with strong growth in sales and earnings per share, though no dividend was announced.

Despite encouraging results, the market failed to respond. Going forward, volatility may persist amid geopolitical tensions, margin pressure and the ongoing T+1 transition, though stability could emerge once forced selling subsides, KTrade projected.

Arif Habib Limited (AHL) noted that the KSE-100 displayed a very weak start to the week, falling 3.16% day-on-day to close below 170k. Only two shares rose while 98 fell with Lucky Cement (-6.54%), Fauji Fertiliser (-2.64%) and Engro Holdings (-4.54%) contributing the most to the index's decline.

Meanwhile, OGDC reported an 18% year-on-year decline in 2QFY26 earnings to Rs34.7 billion (EPS Rs8.07) compared to Rs41.4 billion (EPS Rs9.63) last year, mainly due to a 13% drop in oil prices, lower gas output, higher exploration costs and reduced other income.

Additionally, Afghanistan's Taliban government said it would respond to a series of cross-border airstrikes by Pakistan along the country's eastern border, reigniting tensions between the two neighbours. Regional tensions were weighing heavily on the index, which was also seeing a rollover week, AHL said.