Afghanistan conflict weighs on PSX

KSE-100 dips 831 points, recovers from 3,081-point intra-day plunge

KARACHI:

The Pakistan Stock Exchange (PSX) ended Friday's session on a weaker note as geopolitical tensions with Afghanistan triggered early selling, pulling the benchmark KSE-100 index down by 831 points to close at 168,062.

The index had plunged as much as 3,081 points intra-day after reports that Pakistan targeted terrorist outfits and their logistical support bases in Afghanistan, before trimming losses later in the day. Heavyweight stocks, particularly United Bank, Fauji Fertiliser, Oil and Gas Development Company, Pakistan Petroleum and MCB Bank, drove the bulk of the decline, cumulatively shaving 658 points off the index.

At the close of trading, the benchmark KSE-100 index posted a decline of 830.92 points, or 0.49%, and settled at 168,062.17.

Topline Securities, in its market review, noted that the KSE-100 opened on a negative note and declined to the intra-day low of -3,081 points (-1.82%). The negativity can be attributed to regional tension with Afghanistan, where Pakistan carried out "precise operations, inflicting heavy losses on terrorist outfits".

Some recovery was observed later in the day as no further escalation in the situation was witnessed. The index settled at 168,062 (down 0.49%). The top negative contribution came from UBL, FFC, OGDC, PPL and MCB as they cumulatively wiped off 658 points.

Traded value-wise, NBP (Rs1.36 billion), MCB (Rs1.12 billion), PPL (Rs1 billion), The Bank of Punjab (Rs969 million) and Bank Alfalah (Rs905 million) dominated the activity. Traded volume and value for the day stood at 536 million shares and Rs25.5 billion, respectively, Topline said.

Arif Habib Limited (AHL) noted that consolidation following the previous session's sharp surge, coupled with escalating tensions between Pakistan and Afghanistan, dragged the benchmark KSE-100 index down by 2.9% week-on-week and 8.75% month-on-month. The brokerage highlighted that geopolitical concerns intensified as China urged both countries to exercise restraint while pursuing diplomatic channels and Pakistan's Defence Minister Khawaja Asif warned of "open war" with Afghanistan.

Despite the near-term pressure, AHL emphasised that the tail-end of March typically marks the beginning of a seasonally bullish period for the KSE-100. It added that following an almost 15% drawdown, the index appears poised for a rebound towards the 175,000 level, with sustained support above 165,000 likely to underpin such a move.

Technically, the index currently trades about 5% below its 100-day moving average but remains 7% above the 200-day moving average, levels the brokerage described as long-term accumulation zones.

On Friday, the market breadth remained negative, with 34 advancing shares against 63 decliners. Among index movers, Bank Alfalah, Engro Holdings and Askari Bank were the main positive contributors, while United Bank, Fauji Fertiliser and Oil and Gas Development Company weighed on the benchmark.

AHL noted that the KSE-100 profitability – based on 83% of index weight – grew 5.3% year-on-year in CY25, driven by strong earnings expansion across investment banking (+50%), auto assemblers (+44%), miscellaneous (+36%), textile composite (+31%) and cement (+24%), followed by banks, oil and gas marketing companies and other sectors, with modest growth in food and fertiliser.

Shares of 472 companies were traded in the ready market. Of these, 161 stocks closed higher, 257 fell and 54 remained unchanged.

Unity Foods was the volume leader with trading in 50.3 million shares, losing Rs1.18 to close at Rs10.67. It was followed by First National Equities with 36.2 million shares, gaining Rs0.02 to close at Rs1.54 and BOP with 30.6 million shares, losing Rs0.11 to close at Rs31.70. Foreign investors sold shares worth Rs1.5 billion, the National Clearing Company reported.