PSX sinks 1,109 points as oil, Hormuz risks hit sentiment

The Pakistan Stock Exchange (PSX) reversed its early gains on Wednesday, with the benchmark KSE-100 index coming under selling pressure in the latter part of the session as rising oil prices and uncertainty surrounding the Strait of Hormuz dampened investor sentiment.

The index opened on a positive note in the morning as the KSE-100 index had gained 483.18 points, or 0.27%, to reach 178,438.68 by 9:34am. The buying was led by key sectors including automobile assemblers, cement, commercial banks, oil and gas exploration companies, oil marketing companies and power generation. However, the rally failed to sustain the momentum, gradually falling sharply later in the session.

The index touched an intraday high of 178,942.31 before dropping to a low of 176,638.11 and ultimately settled at 176,846.36, down 1,109.15 points, or 0.62%.

Investor sentiment remained subdued as oil prices climbed to their highest level in around three weeks. Persistent uncertainty over shipping through the Strait of Hormuz, coupled with disruptions to global supplies, heightened concerns over energy costs and their potential impact on the broader economy.

Adding to the late-session pressure, news that Prime Minister Shehbaz Sharif had directed Petroleum Minister Ali Pervaiz Malik to travel to Karachi and engage with oil refineries over relief on fuel prices further weighed on investor sentiment.

Also Read: PSX plunges over 2,500 points as regional uncertainty, oil prices rattle investors

Arif Habib Limited (AHL) Deputy Head of Trading Ali Najib observed that the market opened on a positive note, briefly touching an intraday high of 178,942 (+987 points; +0.55%).

However, sentiment weakened after media reports that the petroleum minister would negotiate with local refineries for a reduction in diesel prices, amid elevated fuel costs and global energy-market disruptions. The development triggered broad-based selling in the refinery sector, weighing on the broader market.

On the index contribution front, United Bank, Engro Holdings, Habib Bank, Fauji Fertiliser, Attock Refinery, Meezan Bank, Mari Energies, Systems Limited, Cnergyico Pk, and National Bank collectively erased 859 points from the benchmark index.

Going forward, Najib expected heightened volatility and selective profit-taking, with geopolitical developments and oil prices remaining key drivers of market direction.

Overall, trading volume decreased to 787.8 million versus Tuesday’s total of Rs1.03 billion. In the ready market, shares of 496 companies were traded. Of these, 185 closed higher, 271 fell, and 40 remained unchanged. Cnergyico Pk was the volume leader with trading in 217.5 million shares.