PSX loses 1,332 points amid selling pressure

Oil surge, inflation and US-Iran uncertainty impact market outlook

KARACHI:

Pakistan Stock Exchange (PSX) reversed early gains on Thursday as rising oil prices and inflationary concerns weighed on investor sentiment, while uncertainty about any breakthrough in US-Iran diplomatic efforts added to the cautious mood.

The benchmark KSE-100 Index fell 1,332.47 points, or 0.78%, to settle at 168,636.85. During the session, it touched the intra-day high of 170,688.38 and low of 168,567.79. Meanwhile, crude prices rose around 2% after China suspended oil product exports, tightening global fuel markets already facing supply constraints, whereas investors continued to assess diplomatic efforts to end the US-Iran war.

On the domestic front, Pakistan's inflation slowed to 10.26% in September from 11.1% in August, primarily led by lower food prices, but remained above the State Bank's medium-term target range. The market had opened on a positive note, with the KSE-100 reaching 170,270.16, up 300.84 points, or 0.18%, at 10:15 am before losing ground.

Muhammad Awais Ashraf of AKD Securities assessed that easing inflationary pressures amid a strong external account position, along with a reduction in domestic political noise, would strengthen investor confidence. Any positive development on the US-Iran war will serve as a key trigger, while the normalisation of trade flows from GCC will reduce the severity of the ongoing crisis. "We advise investors to focus on banks, E&P, fertiliser, textile, OMCs, technology, steel and automobile sectors. Within these, E&Ps and OMCs are positioned to benefit from resolution of the gas-sector circular debt," Ashraf wrote.

"Investor sentiment remained subdued as participants adopted a cautious approach amid heightened geopolitical tensions, which also led to a sharp rise in crude oil prices," JS Global analyst Nawaz Ali commented. Meanwhile, the fragile domestic political situation further weighed on market sentiment and kept investors on the sidelines. "Going forward, trading activity is expected to remain subdued in the absence of fresh market triggers. However, any positive development on the US-Iran front can help improve investor sentiment and provide some relief to the market," Ali mentioned.

KTrade Securities wrote in its market wrap that the index reversed early gains amid sustained selling pressure, shedding 1,332 points (-0.8%). Among key contributors, Kohinoor Textile, Services, Attock Refinery and Ibrahim Fibres provided support, while Pakistan Petroleum, Hub Power, OGDC and Fauji Fertiliser weighed on the index.

Arif Habib Limited (AHL) observed that 14 shares rose while 86 fell with Kohinoor Textile (+1.02%), Services (+0.26%) and Attock Refinery (+0.21%) contributing the most to the index gains. PPL (-2.45%), UBL (-0.81%) and Hubco (-1.22%) were the biggest drags

In a major report, the headline inflation for September 2026 arrived at 10.3% year-on-year, which marked an increase from 5.8% in September 2025. On a month-on-month basis, the inflation increased by 1.3% in September. As a result, the average inflation for 1QFY27 jumped to 10.21% from 4.30% in the same period of last year

Also, Pakistan's government was in discussions with counterparts in Iran, seeking a safe passage for two October shipments of Qatari LNG through the Strait of Hormuz. "The bias remains to the downside with 166k clearly in sight," AHL predicted.

Cumulatively, trading volumes stood at 548.4 million shares, down from 591.2 million on Wednesday. In the ready market, 121 companies advanced, 323 declined and 48 remained unchanged. Kohinoor Spinning was the volume leader with trading in 93.8 million shares, rising Rs0.11 to close at Rs5.84.