PSX stays in red amid oil supply disruptions

KSE-100 index sheds 1,371 points on persistent selling pressure

KARACHI:

Investor confidence dipped at the Pakistan Stock Exchange (PSX) on Wednesday as the KSE-100 index opened in the red and remained in the same zone, with selling pressure spreading across major sectors amid elevated oil prices and Middle East supply disruptions.

The benchmark index lost 1,370.52 points, or 0.81%, to close at 168,021.80. During the day, it traded between the high of 169,382.01 and low of 167,849.70. Automobile assemblers, cement companies, commercial banks, oil and gas exploration firms and oil marketing companies came under pressure.

Meanwhile, global oil prices retreated after a two-day rally in the wake of an unexpectedly large build-up in US crude inventories, while supply disruptions in the Gulf continued to hurt Asian markets.

"Selling pressure persisted at the PSX, with the benchmark KSE-100 index declining 1,371 points," said JS Global analyst Mubashir Anis Naviwala. The index remained under pressure throughout the session after a weak opening, dropping to the intra-day low of 167,850 before recovering modestly.

Commercial banks, fertiliser and cement stocks were among the key sources of pressure. Oil & gas, technology and power generation sectors also weighed on the index. Trading activity remained relatively subdued amid continued caution due to prevailing market uncertainty, while selective buying provided some support, Naviwala added.

Ahmed Sheraz, equity trader at KTrade Securities, wrote that the KSE-100 closed down by 1,371 points, or 0.81%, as selling pressure remained dominant across the market. The decline was largely broad-based, led by commercial banks, fertiliser and cement stocks. Fauji Fertiliser, NBP, Engro Holdings, HBL, Lucky Cement and Bank Alfalah were among the major contributors to the downside. Despite the State Bank of Pakistan (SBP) keeping the policy rate unchanged at 11.50%, persistent external and inflationary pressures continued to weigh on investor sentiment.

International oil prices stayed elevated, with Brent trading around $108/barrel and at times moving above $109. "Until there is greater clarity on the Strait of Hormuz and Red Sea shipping routes, sustained market strength is likely to be a challenge. With high oil prices adding to inflationary and macroeconomic risks, a cautious approach is increasingly likely in the near term," Sheraz predicted.

Arif Habib Limited (AHL) Deputy Head of Trading Ali Najib observed that investors remained cautious amid the escalating US-Iran conflict and shipping disruptions through the Strait of Hormuz. Oil traded above $104/barrel, raising concerns over higher domestic fuel prices, renewed inflationary pressures, a widening import bill and potential implications for the monetary policy outlook.

On the corporate front, Millat Tractors reported FY26 earnings per share of Rs19.65, up 23% from Rs15.97 last year, and declared a cash dividend of Rs11/share, taking FY26 cumulative payout to Rs21/share. Fauji Fertiliser, NBP, Engro Holdings, HBL, Lucky Cement, Bank Alfalah, Pakistan Petroleum, Millat Tractors, PTCL and Mari Energies emerged as the top laggards, collectively dragging the index down by 932 points.

"Going forward, market activity is expected to remain volatile, with selective profit-taking and stock-specific moves amid the ongoing result season. Geopolitical developments and elevated oil prices will remain the key catalysts," Najib said.

Overall trading volumes decreased to 356.1 million shares compared with 372 million a day ago. The value of traded shares stood at Rs19.5 billion. WorldCall Telecom was the volume leader with trading in 40 million shares, losing Rs0.04 to close at Rs1.02. Foreign investors sold shares worth Rs306 million.