PSX dips 1,464 points on oil jitters

KSE-100 index falls for second straight day over fading US-Iran deal hopes

KARACHI:

Pakistan Stock Exchange (PSX) extended losses for the second straight session on Tuesday as the benchmark KSE-100 index dipped 1,464 points, or 0.81%, in the backdrop of a sharp rise in oil prices and fading hopes of a US-Iran deal on reopening the Strait of Hormuz.

Selling pressure dragged the index below the 180,000 mark because investors turned cautious over growing uncertainty about oil supplies and regional tensions that clouded the market outlook. The KSE-100 climbed to the intra-day high of 181,017.29 before extensive selling pulled it down to the low of 179,778.99. It closed at 179,846.68.

The weakness emerged as investors weighed the potential economic fallout from high energy costs, with uncertainty over the duration of Hormuz disruption adding another layer of risk. The latest retreat erased a sizeable proportion of recent gains, signalling that investors were becoming increasingly selective at a time of heightened geopolitical risks and a less favourable oil price outlook.

"Bearish momentum dominated trading floors, primarily driven by fading hopes of a US-Iran diplomatic resolution of the conflict, which triggered a spike in crude oil prices and heightened global market uncertainty," JS Global analyst Muhammad Hasan Ather wrote. Institutional profit-taking at higher levels further weighed on investor sentiment. In the short term, sideways consolidation was expected. However, resilient corporate earnings, monetary policy easing and long-term macroeconomic stabilisation signal a strong underlying upside potential, Ather said.

According to KASB KTrade's Ahmed Sheraz, the KSE-100 closed down by 1,464 points (-0.81%) as renewed geopolitical concerns and higher oil prices weighed on investor sentiment. The session remained broadly negative, with Fauji Fertiliser, Engro Holdings, Lucky Cement, United Bank, Bank AL Habib, Oil & Gas Development Company and Hub Power being the major index drags.

Sector-wise, cement, fertiliser, investment banks and oil & gas came under selling pressure, reflecting a cautious approach, driven by rising energy costs, which revived concerns over margins, inflation and the broader economic impact.

Oil prices climbed amid renewed uncertainty surrounding the US-Iran situation and the Strait of Hormuz. Brent moved close to $90 per barrel amid fading hopes of a near-term agreement. Asian equities also faced pressure as investors assessed the implications of higher energy prices. "Going forward, volatility is likely to remain elevated, with market direction closely tied to developments on the geopolitical front and movements in oil prices," Sheraz added.

Arif Habib Limited Deputy Head of Trading Ali Najib noted that in a negative session on Tuesday, the KSE-100 index dropped 1,464 points (-0.81%). The market opened on a positive note, with the benchmark touching the intra-day high of 181,017 (+293 points; +0.16%). However, rising international oil prices amid renewed geopolitical tensions weighed on investor sentiment, resulting in a negative close.

On the corporate front, Fauji Cement reported net FY26 earnings of Rs16.2 billion (EPS: Rs6.6), up 21% year-on-year, which came in line with estimates. The company announced a final cash dividend of Rs1.5 per share. Fauji Fertiliser, Engro Holdings, Lucky Cement, UBL, Bank AL Habib, OGDC, Hub Power, Systems Ltd, The Bank of Punjab and Mari Energies erased 1,090 points from the benchmark index.

"It is expected that the KSE-100 will remain volatile but broadly range bound, with geopolitical developments likely dictating the next major move," he added.

Overall trading volumes decreased to 860.3 million shares compared with Monday's total of 917.3 million. The value of traded shares stood at Rs38.9 billion.

Shares of 493 companies were traded. Of these, 148 stocks closed higher, 311 fell and 34 remained unchanged.

Cnergyico Pk was the volume leader with trading in 134 million shares, losing Rs0.29 to close at Rs12.84. Foreign investors bought shares worth Rs82.9 million, the National Clearing Company reported.