PSX faces selling pressure, loses 1,576 points

Geopolitical risks, profit-taking in key sectors undermine investor trust

KARACHI:

The Pakistan Stock Exchange (PSX) on Wednesday faced persistent selling pressure as the benchmark KSE-100 index closed sharply lower amid heightened geopolitical uncertainty and cautious investor sentiment.

In the morning, the market saw significant stock selling, setting a jittery tone. Intra-day volatility remained elevated, with the index briefly recovering 119 points (+0.07%) around 11:34 am after an early decline of 135 points (-0.08%), reflecting the absence of a clear direction.

Throughout the session, sentiment remained fragile as uncertainty surrounding anticipated US-Iran peace talks in Islamabad kept investors on edge. It led to a "wait-and-see" approach, resulting in subdued trading and a lack of buying interest.

Market activity was largely shaped by a tug of war between supportive and negative triggers. A $1 billion Saudi deposit provided some psychological support and helped cushion deeper losses. However, this was outweighed by aggressive profit-taking across key sectors. During the day, the KSE-100 recorded a high of 173,453 and a low of 171,255. The index ended lower by 1,576.48 points, or 0.91%, and settled at 171,579.31.

"Investors are closely monitoring progress on the potential US-Iran agreement, as Tehran continues to evaluate the proposed terms and is demanding the reopening of the Strait of Hormuz before formally responding to the resumption of negotiations," AKD Securities Director Research Mohammed Awais Ashraf told The Express Tribune.

An extension of ceasefire should be interpreted as a constructive development by investors; however, the continued closure of Hormuz remained a key concern, Ashraf observed.

According to JS Global analyst Nawaz Ali, a range-bound activity was observed, with the index largely remaining bearish, as investors were cautious over uncertainty surrounding US-Iran negotiations despite the announcement of an extension in ceasefire. The KSE-100 closed at 171,579, down 1,576 points.

Looking ahead, the market is expected to remain volatile and any significant geopolitical developments could influence investor sentiment and market direction. Ali advised investors to adopt a "buy-on-dips" strategy.

KTrade Securities equity trader Ahmed Sheraz observed that the KSE-100 fell 1,576 points, as selling pressure persisted in a cautious and largely mixed session. Early attempts at stabilisation faded, with sentiment remaining fragile amid external uncertainties. Activity was concentrated in Cnergyico PK, Yousaf Weaving and The Bank of Punjab. On the downside, index-heavy stocks including UBL, Lucky Cement, Pakistan Petroleum, HBL and Oil and Gas Development Company weighed on market's performance, he said.

While the extension in ceasefire offered a short-term relief, the continued closure of the Strait of Hormuz and lack of progress on US-Iran negotiations were keeping risk appetite subdued. Neither side confirmed diplomatic engagements in Pakistan, signalling a near-term deadlock. Meanwhile, oil prices remained elevated, with Brent hovering around $98-99 per barrel, adding to inflationary pressure and external account concerns, Sheraz said.

The market experienced notable swings during the day, with the benchmark index reaching the intra-day high of 173,453 points and a low of 171,255 points, reflecting cautious investor sentiment in light of escalating geopolitical tensions, Topline Securities commented.

Key index constituents, including UBL, Lucky Cement, PPL, HBL and OGDC, remained under sustained selling pressure, collectively eroding 762 points, it said.

Overall trading volumes decreased to 1.05 billion shares compared to Tuesday's tally of 1.16 billion. The value of shares traded during the day stood at Rs37.3 billion.

Shares of 486 companies were traded. Of these, 141 rose, 303 fell and 42 remained unchanged.

Unity Foods was the volume leader with trading in 133.4 million shares, gaining Rs0.99 to close at Rs13.53. Foreign investors bought shares worth Rs74.5 million, the National Clearing Company reported.