PSX tumbles over 16,000 points

Panic selling stemming from Middle East war triggers record single-day fall

KARACHI:

Middle East tensions took a heavy toll on the Pakistan Stock Exchange (PSX) on Monday as panic selling sparked a "bloodbath" and pulled the KSE-100 index down by over 16,000 points – the largest single-day fall in the bourse's history.

Panic gripped the market from the opening bell, fuelling relentless stock offloading across major sectors. There was heightened investor anxiety amid ongoing geopolitical uncertainty in the wake of US-Israel and Iran war. The sharp decline of 5% in the KSE-30 index caused an automatic market halt at 9:22 am, resulting in suspension of all equity-based trading as per PSX regulations. All outstanding orders were cancelled by the system and trading was scheduled to resume after an hour.

Intra-day, the benchmark index swung between the high of 159,329 and the low of 151,748, underscoring extreme volatility throughout the session. At close, the KSE-100 index recorded a plunge of 16,089.17 points, or 9.57%, to settle at 151,973. Some market analysts attributed the dramatic collapse to investor overreaction to regional developments, even though those events had no direct impact on Pakistan.

"High leverage and overbought positions triggered panic selling at the Pakistan Stock Exchange," Topline Securities CEO Mohammed Sohail told The Express Tribune. Fears stemming from regional tensions also sparked aggressive selling at the stock market but the Pakistani rupee and bond yields remained stable, indicating limited macro impact so far, he said. With the market trading at a price-to-earnings ratio of nearly 7x, valuations appear compelling, offering attractive entry points to medium- and long-term investors. "If macroeconomic stability persists, the recent sell-off could ultimately prove to be an overreaction," Sohail added.

JS Global analyst Mubashir Anis Naviwala commented that the PSX witnessed a "bloodbath" as the KSE-100 crashed nearly 10% intra-day. The index plunged to 152,991, down over 15,000 points (-8.97%) within a few minutes of the commencement of trading. Panic selling gripped the market amid escalating geopolitical tensions. Following the sharp fall, trading was halted for one hour under circuit breaker rules. Commercial bank, fertiliser, oil & gas and cement stocks led the massive decline. The index later traded below 152,000, marking its steepest day-on-day drop on record, Naviwala said and anticipated that the short-term outlook would remain fragile as volatility may stay elevated.

"The PSX witnessed an aggressive sell-off, with the benchmark KSE-100 index suffering one of its steepest single-day declines in history," KTrade Securities wrote. The index plunged 16,089 points as escalating geopolitical tensions sparked immediate and widespread panic selling at the opening bell. The index swiftly locked at the lower circuit in early trading, triggering a temporary halt under risk management protocols.

Upon resumption, the volatility remained intense. Although a brief intra-day stabilisation attempt emerged, persistent selling pressure and forced liquidation prevented any meaningful recovery by the close.

Losses were broad-based. Heavyweight sectors such as banking, exploration & production, oil marketing, cement, fertiliser and power all ended sharply lower, highlighting a decisive risk-off shift rather than sector-specific weakness. The magnitude of the decline reflected margin calls, leverage unwinding and aggressive portfolio de-risking.

The index is 20% off recent highs; the key test is whether institutional cash absorbs selling or volatility drives the market, KTrade said.

AKD Securities remarked that the KSE-100 overreacted to the Middle East military conflict, plunging 10% at the open, adding to its 8.7% decline in February and prompting a trading halt within the first seven minutes of the session. "However, we expect the index to stage a recovery as the direct economic impact on Pakistan appears manageable and the country is not a direct party to the conflict," it said. Overall trading volumes increased to 809.5 million shares against Friday's tally of 536.2 million. The value of traded shares stood at Rs48.5 billion.

Shares of 483 companies were traded. Of these, 21 closed higher, 413 fell and 49 remained unchanged.

K-Electric led the volumes chart with trading in 163.3 million shares, losing Rs0.96 to close at Rs6.70. It was followed by WorldCall Telecom with 82.6 million shares, falling Rs0.17 to close at Rs1.12 and First National Equities with 41.8 million shares, shedding Rs0.31 to close at Rs1.23. Foreign investors sold shares worth Rs1.25 billion, the National Clearing Company reported.