PSX plunges 2,288 points on political noise

Govt-PTI standoff, reversal of oil losses weigh on investor confidence

KARACHI:

Pakistan Stock Exchange (PSX) came under intense selling pressure on Monday, with the benchmark KSE-100 index plunging 2,288 points, as domestic political tensions weighed heavily on investor sentiment, while falling international oil prices failed to provide relief.

The index settled at 165,867.32, down 1.36% from the previous close of 168,155.49. It hit the intra-day high of 167,918.37 and low of 165,764.21, reflecting volatility throughout the session. The domestic political anxiety deepened after talks between the government and the Pakistan Tehreek-e-Insaf (PTI) collapsed without a breakthrough, with the PTI pressing ahead with its march towards Islamabad. Differences over the counter-terrorism policy and access to jailed PTI founder Imran Khan were among the key sticking points, heightening concerns over renewed political confrontation. The market stayed under pressure amid volatile oil prices, which initially fell on expectations of higher Middle Eastern supplies and G7's planned release of emergency stocks before turning higher later following worries about disruptions to regional energy supplies.

According to Arif Habib Limited (AHL), eight shares rose while 91 fell with Pakistan Oilfields (+1.16%), Tariq Glass Industries (+0.81%) and Highnoon Laboratories (+0.23%) contributing the most to the index's gains. Alternatively, UBL (-1.57%), Engro Holdings (-1.77%) and HBL (-2.34%) were the biggest index drags. Meanwhile, AHL mentioned, the political party of former PM Imran Khan began its march towards Islamabad after talks with the government broke down over different demands including access to the jailed leader. Authorities placed shipping containers and other roadblocks around Islamabad to prevent demonstrators from entering the capital.

On the regional front, Yemen's government launched a full-scale military campaign to recapture the Houthi-held territory after weeks of escalating conflict between the Iran-backed group and Saudi Arabia. "After hitting the downside target of 166k, the potential for a near-term pullback rises; however, additional downside targets remain a possibility in the coming weeks," AHL wrote.

Ahmed Sheraz of KASB KTrade noted that the KSE-100 extended its correction on Monday, closing at 165,867, down 2,288 points, or 1.36%, amid broad-based selling and heightened risk aversion. Volumes remained subdued at 169 million shares, with Pakistan International Bulk Terminal, Cnergyico, K-Electric and The Bank of Punjab leading the activity.

Selling was witnessed across commercial banks, investment banks, cement, oil & gas and power sectors, where UBL, Engro Holdings, HBL, Hub Power, Pakistan Petroleum and OGDC were among the major laggards. Meanwhile, international oil prices remained elevated around $101-103/barrel, while renewed tensions around the Strait of Hormuz and Red Sea added pressure to the sentiment.

Domestically, rising political noise, including the long march and speculation around potential constitutional measures, further weighed on investor confidence. "Going forward, we expect the KSE-100 to remain volatile and range bound until greater clarity emerges on the political front and geopolitical tensions ease," Sheraz said. Cumulatively, trading volumes fell to 441.9 million shares compared with 494 million in the previous session.

Shares of 499 companies were traded in the ready market, of which 55 closed higher, 409 fell and 35 stood unchanged.

First National Equities was the volume leader with trading in 50.3 million shares, falling Rs0.05 to close at Rs1.17. Foreign investors sold shares worth Rs45 million, the National Clearing Company reported.