PSX erases gains as ME worries trigger selling

Pakistan equities on Wednesday experienced a volatile session as early optimism gave way to selling pressure over geopolitical concerns.

The benchmark KSE-100 index at the Pakistan Stock Exchange (PSX) opened on a positive note and displayed resilience during early trading, but it later turned bearish and directionless as investors remained cautious amid geopolitical uncertainty and elevated global oil prices.

Buying activity in select sectors was primarily driven by the State Bank's announcement that it had received $1.3 billion from the International Monetary Fund (IMF) under the Extended Fund Facility (EFF) and the Resilience and Sustainability Facility (RSF).

However, the momentum proved short-lived as the Middle East conflict dampened market confidence, prompting investors to resort to profit-taking and offloading their positions. During the day, the KSE-100 touched the intra-day high of 169,687.29 points and low of 167,329.34. By the close of trading, it declined by 1,465.09 points, or 0.87%, to settle at 167,451.14.

KTrade Securities' equity trader Ahmed Sheraz observed that the KSE-100 index closed down by 1,465 points (-0.87%) in a mixed and largely directionless session as investors remained cautious amid persistent geopolitical uncertainty and elevated international oil prices. There was a lack of conviction across the market and the broader momentum remained subdued throughout the session. Despite oil hovering near the $107-109/barrel range during trading hours, the absence of any major geopolitical escalation or diplomatic breakthrough kept the market uncertain and range bound.

Selling pressure was witnessed in heavyweight names including Habib Bank, United Bank, Bank AL Habib, Lucky Cement and Hub Power. Commercial bank, technology and cement sectors closed in the red as investors preferred cautious positioning amid the uncertain macro and geopolitical backdrop. Sheraz believes the focus will remain centred on geopolitical headlines, particularly developments surrounding Trump's China visit and regional security dynamics.

It was another day of selling pressure that forced the market deeper into the weekly support of 167k-170.5k, commented Arif Habib Limited (AHL). Only 27 shares rose while 71 fell with Pakistan Petroleum (+1.12%), Service Industries (+1.76%) and Colgate-Palmolive (+2.1%) contributing the most to the index gains. On the other side, Habib Bank (-3.88%), Bank AL Habib (-2.82%) and United Bank (-1.14%) were the biggest index drags.

Meanwhile, the MSCI added Habib Metropolitan Bank (+0.06%) to its frontier index and removed pharma firm The Searle Company (-1.7%). Additionally, the government's National Accounts Committee revised Q1 GDP growth to 3.92% vs 3.63%. Also, the finance minister met an IMF team to discuss Pakistan's macroeconomic outlook and preparations for the upcoming federal budget.

Declines during the week brought the KSE-100 into the heart of a key weekly support zone, from where AHL expects demand to re-emerge and potentially drive the benchmark towards the 175k level. Topline Securities noted that the benchmark index stayed under pressure throughout a volatile and range-bound trading session as cautious investor sentiment prevailed amid the absence of tangible progress in ongoing negotiations and lingering uncertainty surrounding developments between the United States and Iran. Persistently elevated oil prices further dampened market confidence.

The index experienced intra-day fluctuations, touching the low at 1,587 points. Although the market staged a modest recovery towards the close, the KSE-100 settled at 167,451, down 1,465 points, Topline said. Overall trading volumes dropped to 684.9 million shares versus Tuesday's total of 1.02 billion. The value of shares traded during the day stood at Rs21.7 billion.

Shares of 483 companies were traded. Of these, 149 climbed, 298 fell and 36 remained unchanged.

Agha Steel Industries was the volume leader with trading in 58.7 million shares, gaining Rs0.43 to close at Rs8.70. Foreign investors sold shares worth Rs202.5 million, the National Clearing Company reported.