PSX slumps over 3% amid rising oil prices

ME tensions continue to fuel losses as KSE-100 sheds 4,865 points

KARACHI:

The Pakistan Stock Exchange (PSX) on Monday remained highly volatile, reflecting its vulnerability to regional shocks and domestic macroeconomic uncertainty, and the benchmark index shed over 4,850 points, or 3.2%.

A sense of nervousness prevailed since the morning as investors awaited the outcome of Pakistan's diplomatic efforts to de-escalate tensions in the Middle East. Market players were jittery over surging global oil prices, which fuelled inflationary pressures.

During the day, the bourse swung between the high of 151,814 and low of 144,657. Heavy selling drove the KSE-100 index to sharply lower levels before midday. Though the index recovered slightly, it closed with a steep loss of 4,864.54 points, or 3.21%, at 146,842.97.

KTrade Securities noted that the KSE-100 extended its losing streak, closing down by 4,865 points, as external pressure kept market sentiment fragile. The bourse faced sustained selling from the outset, with no meaningful recovery attempt, reflecting a clear risk-off environment and weak investor confidence.

Activity remained relatively subdued, with KSE-100 volumes at 308 million shares, signalling lack of strong conviction across the board. Trading interest was concentrated in selective low-priced names, which indicated continued preference for momentum-driven plays over broader participation.

Sector-wise, selling pressure was widespread, where commercial banks, cement and fertiliser firms contributed to the bulk of the decline. Additionally, oil & gas and technology stocks came under pressure amid cautious positioning and global uncertainty.

Looking ahead, market direction remains closely linked to US and Iran-linked developments and their implications for oil prices. Any diplomatic progress could bring down crude prices and offer near-term relief, KTrade said.

"Intense selling pressure gripped the PSX as fears of a prolonged conflict in the Middle East dampened investor sentiment, pushing the index to the intra-day low of 144,657," JS Global analyst Mubashir Anis Naviwala observed. Although some recovery was seen later, the market remained deeply in the negative territory.

Heavy selling was observed in banking, cement and fertiliser sectors. Overall sentiment remained bearish as investors stayed cautious amid escalating geopolitical risks and global market uncertainty, he added.

Arif Habib Limited (AHL) commented that the KSE-100 saw another large drawdown, falling 3.21% to close below 150,000. Only two shares rose while 97 fell with Fauji Fertiliser Company (-2.95%), Engro Holdings (-3.68%) and Meezan Bank (-3.84%) being the biggest drags on the index.

Among corporate news, the board of directors of Engro approved the buyback of up to 45 million shares, to be conducted between May 7 and October 25, aimed at improving cash flow and providing an exit opportunity for investors wishing to liquidate their holdings. Additionally, the Middle East conflict continued to suppress risk appetite with investors still hesitant to build positions despite some markets trading higher on Monday.

The KSE-100 is now approaching the low hit earlier in the month and without some positive news flow it is in danger of being taken out. AHL advised investors to continue accumulating at depressed levels.

According to Topline Securities, the local bourse felt the heat on Monday as surging oil prices and geopolitical tensions rattled investor confidence. Adding to the unease, investors grew wary of the government's decision to keep fuel prices unchanged for a second consecutive week, raising concerns of fiscal strain, it noted.

Bears wasted no time to seize control, unleashing aggressive selling across the board. Relentless liquidation pushed the index to the intra-day low of 7,050 points. It finally settled at 146,843, with a sharp drop of 4,865 points (-3.21%).

Heavyweights such as Fauji Fertiliser, Engro Holdings, Meezan Bank, Lucky Cement and United Bank acted as key laggards, dragging the index down by 1,527 points, Topline said.

Overall trading volumes increased to 529.1 million shares compared with the previous tally of 435.5 million. The value of traded shares stood at Rs29.6 billion.

Shares of 481 companies were traded. Of these, 51 closed higher, 379 fell and 51 remained unchanged. K-Electric was the volume leader with trading in 56.5 million shares, down Rs0.31 to close at Rs6.62. Foreign investors sold shares worth Rs426.8 million, the National Clearing Company reported.