Institutional selling wipes out PSX gains
Pakistan Stock Exchange (PSX) endured a topsy-turvy trading session on Tuesday, where the KSE-100 index reversed sharp early gains to close down by over 1,100 points as profit-taking swept through heavyweight sectors against the backdrop of cautious global investor sentiment.
After climbing to the intra-day high of 178,768.83, the index steadily lost ground as selling intensified across commercial banks, oil and gas exploration companies, cement, investment companies and fertiliser stocks. The KSE-100 touched the intra-day low of 177,043.10 and eventually settled at 177,083.22, down 1,116.80 points, or 0.63%.
The reversal came as investors adopted a cautious stance amid mixed signals from overseas markets. Asian equities struggled for direction as markets weighed strong US corporate earnings against lingering geopolitical uncertainty, while oil prices rose more than 2% due to uncertainty about a diplomatic solution to the US-Iran conflict, while disruptions to oil flows through key shipping routes persisted.
Ahmed Sheraz, equity trader at KTrade Securities, commented that the KSE-100 closed down 1,117 points and the market remained under pressure throughout the session amid the absence of fresh positive triggers to sustain recent gains. Broad-based selling of commercial banks, oil and gas, cement, investment companies and fertiliser stocks led the decline.
Investors largely stayed on the sidelines despite Brent crude trading in the $84-86-per-barrel range, awaiting fresh economic and corporate catalysts. Sheraz predicted that the market would remain news-driven, with corporate earnings, macroeconomic developments and foreign fund flows expected to guide investor sentiment, while the 176,500-177,000 range stood as a key support zone.
"The downturn was driven primarily by aggressive institutional profit-taking at elevated resistance levels, alongside cautious investor sentiment regarding upcoming corporate earnings and geopolitical concerns," Muhammad Hasan Ather of JS Global commented. However, solid underlying corporate earnings power and stabilising macroeconomic indicators kept the overall long-term outlook selectively bullish for market participants, he said.
Arif Habib Limited (AHL) Deputy Head of Trading Ali Najib said easing geopolitical tensions and July's lower-than-expected inflation reading boosted investor confidence, reinforcing expectations of a gradual improvement in the macroeconomic outlook. However, he said the sentiment remained sensitive to external developments, with geopolitical risks, corporate earnings and global oil prices expected to dictate the market's near-term trajectory.
On the macro front, the government reduced petrol and diesel prices by Rs4.08 and Rs2.45 per litre, respectively, effective August 4, following a decline in ex-refinery prices. In corporate news, Habib Bank reported a record 2QCY26 profit after tax of Rs18.4 billIon (EPS: Rs12.51), up 3% YoY and 14% QoQ, taking 1HCY26 earnings to Rs34.4 billion (EPS: Rs23.5). The bank also announced a cash dividend of Rs6 per share, bringing the cumulative 1HCY26 payout to Rs12/share.
Meezan Bank, PSO, Kapco, Power Cement and Millat Tractors collectively added 175 points to the index. Conversely, UBL, Engro Holdings, OGDC, Lucky Cement and PPL erased 580 points amid selective profit-taking, Najib wrote.
Overall trading volumes decreased to 711.3 million shares compared with Monday's total of 785.4 million. The value of traded shares stood at Rs25.9 billion.
Shares of 495 companies were traded. Of these, 161 stocks closed higher, 295 fell and 39 stood unchanged.
Pakistan International Bulk Terminal topped the volumes chart with trading in 89.7 million shares, losing Rs0.34 to close at Rs16.74. Foreign investors bought shares worth Rs166.3 million, the National Clearing Company reported.