PSX stages strong comeback on easing fears

A day after enduring a massive rout when the Pakistan Stock Exchange (PSX) registered the largest single-day plunge of over 16,000 points, the market saw the return of significant buying momentum on Tuesday, bringing a sigh of relief to investors.

By the close of trading, the benchmark KSE-100 index surged 5,159.10 points, or 3.39%, and settled at 157,132.10. The robust recovery came as investors re-entered the market amid improved sentiment and value buying at attractive levels. Investor interest was observed across key sectors, including cement, commercial bank, fertiliser, exploration and production, oil marketing and power generation.

A sense of calm prevailed as market players appeared to be reassessing the broader situation, with expectations that geopolitical tensions may not escalate further, which prompted a shift from risk aversion to selective accumulation.

At the outset, caution prevailed that pushed the index to the intra-day low of 151,259. However, as the session progressed, buying interest emerged, taking the index to the peak of 158,217. Analysts cautioned that volatility may persist in the near term depending on external developments and the overall market sentiment.

"The KSE-100 rebounded following Monday's sharp slide, which was triggered by mutual fund redemptions amid shaky investor sentiment," JS Global Head of Research Waqas Ghani told The Express Tribune. Value buying in blue-chip stocks underpinned the rally as investors stepped in to capitalise on attractive valuations. However, any escalation in geopolitical tensions could cap the upside and keep investor interest guarded in the coming sessions, he added.

KTrade Securities wrote in its market wrap that the PSX staged a strong rebound, snapping Monday's historic sell-off. The KSE-100 index surged 5,159 points, recouping a meaningful proportion of the 16,000-point plunge in the previous session, when geopolitical concerns sparked panic-led liquidation and record losses. The recovery was broad-based and largely flow-driven, with commercial bank, fertiliser, oil & gas, investment bank and power names spearheading the rally. Major support came from Fauji Fertiliser, leading banks, Engro Holdings, Mari Energies, Hub Power, Lucky Cement and Pakistan Oilfields, which reflected diversified institutional accumulation rather than a narrow, stock-specific bounce, KTrade added.

Topline Securities observed that after Monday's heavy sell-off, bulls staged a confident comeback. Early weakness dragged the index to the intra-day low of 714 points, but just when sentiment seemed fragile, buyers quietly returned to the arena. As investors reassessed the situation and grew confident that geopolitical tensions were unlikely to prolong, the mood shifted from fear to opportunity, it said.

Value hunters stepped in, accumulating fundamentally strong stocks at attractive levels. The renewed momentum lifted the index to the intra-day high of 6,244 points before it closed at 157,132, up 5,159 points.

Index-heavy names including Fauji Fertiliser, UBL, Engro Holdings, Meezan Bank and Mari Energies led the charge, collectively contributing 2,753 points, Topline added.

Arif Habib Limited (AHL) commented that the PSX witnessed a strong bounce following Monday's near 10% decline, with the KSE-100 gaining 3.4% day-on-day. Some 66 shares rose while 33 fell with FFC (+5.84%), UBL (+5.72%) and Engro Holdings (+7.06%) contributing the most to index gains. In contrast, Pak Elektron (-9.04%), Adamjee Insurance (-8.74%) and Askari Bank (-4.09%) were the biggest index drags.

In a fresh development, the IMF mission team decided to conduct virtual discussions for the third review of the Extended Fund Facility and the second review of the Resilience and Sustainability Facility in light of the prevailing security situation. On the corporate side, the Citi Pharma (+2.34%) board approved the process to raise Rs1-2 billion in the IPO of Citi Veterinary Pharma, AHL added.