PSX loses 994 points as ME conflict dents trust

Pakistan Stock Exchange (PSX) remained under pressure on Tuesday as fears of a prolonged Middle East conflict unnerved investors while surging oil prices dented their risk appetite. The benchmark KSE-100 index fell 993.92 points, or 0.57%, to settle at 172,642.16.

Trading remained volatile throughout the session, during which the index touched the intra-day high of 173,736.20 and plunged to the low of 171,490.63 before recouping some of the losses towards close.

A deteriorating geopolitical outlook kept investors on the defensive, with concerns mounting about a broader regional escalation and its economic fallout. The situation was aggravated by reports that Yemen's Houthis had attacked energy facilities and cities in Saudi Arabia.

Against this backdrop, oil prices climbed for a third consecutive session, hovering near six-week highs as deepening US-Iran tensions raised the spectre of a prolonged disruption to Middle East crude supplies.

Weak sentiment was reflected in major sectors such as auto assemblers, cement, commercial banks and oil marketing companies, which came under selling pressure. Despite that, trading remained active because investors continued to adjust their positions. Some buying interest emerged at lower levels, but caution prevailed as investors awaited further developments in the Middle East.

KTrade Securities observed that the market witnessed extreme volatility, with the index moving between the intra-day high of 173,736 and low of 171,491, exhibiting a trading band of over 2,200 points. At one point, the index was down more than 2,000 points before staging a strong recovery later in the session.

The recovery came after oil prices eased from around $100 per barrel to $98.30, providing relief and helping the market regain significant ground from its intra-day low. Despite the comeback, the overall sentiment remained cautious. Sector-wise contribution was mixed, where banks, cement and automobile were among the major sectors that contributed negatively to the index.

"Going forward, volatility is likely to stay elevated, with oil remaining a key driver. Any further moderation in crude prices could provide breathing room for the market, while renewed strength could bring selling pressure back to the index," KTrade predicted.

According to JS Global analyst Mubashir Anis Naviwala, Tuesday's trading session remained volatile, where the index hit the intra-day low of 171,491. Selling pressure was more visible during the first half, followed by some recovery later in the session. Commercial banks and cement firms were among the key drags on the index.

Oil & gas and other major sectors also added to the cautious tone. Trading volume stood healthy at around 723 million shares. Overall, market sentiment remained cautious amid ongoing geopolitical uncertainty, Naviwala wrote.

Topline Securities commented that the local bourse came under pressure as the US-Iran conflict and elevated international oil prices continued to weigh on investor sentiment. Concerns over the potential impact on domestic inflation, the external account and Pakistan's import bill prompted investors to book profits following recent gains. Selling was particularly evident across index-heavy sectors, keeping the broader market in the red, Topline added.

The trading volume increased to 722.6 million shares compared with Monday's total of 679.2 million. The value of traded shares stood at Rs27.9 billion.

In the ready market, shares of 496 companies were traded. Of these, 101 stocks closed higher, 359 fell and 36 remained unchanged.

Cnergyico Pk continued to lead the volume chart with trading in 103.8 million shares, gaining Rs0.3 to close at Rs13.32. It was followed by Media Times with trading in 103 million shares, down Rs0.74 to close at Rs6.92 and Pakistan Refinery with 41.1 million shares, higher by Rs2.32 to close at Rs91.16. Foreign investors sold shares worth Rs30.5 million, the National Clearing Company reported.