KARACHI:
Massive selling eclipsed trading at the Pakistan Stock Exchange (PSX) on Tuesday as escalating US-Iran tensions and soaring oil prices sparked panic, dragging the KSE-100 index down by more than 6,400 points.
The market remained under pressure since the opening bell, with investors offloading shares across the board amid fears that the geopolitical situation could disrupt global energy supplies and weigh on Pakistan’s already fragile economic outlook. The KSE-100 touched the intra-day high of 178,112.05 but selling accelerated soon after. Heavy liquidation pushed the index to the intra-day low of 173,349.42 just before close.
The sell-off mirrored weakness across Asian markets after President Trump announced the reinstatement of a naval blockade and said the US would receive a 20% levy on cargo shipped through the Strait of Hormuz, raising fears of disruptions to global energy supplies. The developments pushed crude oil to a one-month high.
The benchmark KSE-100 index closed at 173,518.82, down 6,408.23 points, or 3.56%. KTrade Securities’ equity trader Ahmed Sheraz observed that the KSE-100 faced a sharp sell-off as investor sentiment deteriorated amid fears of a prolonged regional conflict. Concerns over the violation of US-Iran ceasefire, coupled with escalating tensions between Saudi Arabia and the Houthis, triggered broad-based risk aversion, resulting in one of the steepest declines in recent sessions. Despite the sharp correction, trading activity remained robust, with 409 million shares traded on the KSE-100 index.
The selling pressure was widespread, where every major sector ended in the red. Commercial bank, cement, oil & gas, fertiliser, investment bank and power stocks came under heavy pressure as index heavyweights such as UBL, Engro Holdings, Fauji Fertiliser, Lucky Cement, Meezan Bank, Oil & Gas Development Company, HBL, Pakistan Petroleum and MCB Bank were among the key contributors to the benchmark’s decline. Sheraz believes that the near-term direction will remain heavily dependent on developments in the Middle East.
According to Arif Habib Limited (AHL) Deputy Head of Trading Ali Najib, the PSX registered broad-based selling with the KSE-100 plunging 6,408 points (-3.56%) to close at 173,519. Extending the previous day’s decline, the index experienced intense selling as escalating geopolitical worries fuelled panic among investors.
The market opened sharply lower and remained under pressure throughout the session, with participants offloading equities in the backdrop of geopolitical uncertainty and a sharp rise in international oil prices. UBL, Engro Holdings, Fauji Fertiliser, Lucky Cement, Meezan Bank, OGDC, HBL, MCB, PPL and Hub Power emerged as major laggards, wiping 3,264 points off the index.
“Going forward, market direction is expected to remain largely dependent on developments on the geopolitical front,” Najib wrote.
Topline Securities remarked that a “bloodbath” was witnessed at the PSX, driven by heightened geopolitical tensions after the reported collapse of an interim peace arrangement between the US and Iran. Investor sentiment deteriorated following reports that the US imposed a naval blockade and conducted airstrikes, while Iran responded by targeting additional oil tankers transiting the Strait of Hormuz. The escalation fuelled concerns over regional stability, potential disruptions to global oil supplies and increased risk aversion across financial markets, prompting broad-based selling at the PSX, it said.
Overall trading volumes increased to 912.6 million shares compared with Monday’s total of 845.3 million. The value of traded shares stood at Rs45.6 billion.
In the ready market, shares of 498 companies were traded. Of these, only 40 stocks rose, 439 fell and 19 remained unchanged.
Cnergyico Pk was the volume leader with trading in 84.5 million shares, losing Rs0.37 to close at Rs9.68. Foreign investors bought shares worth Rs556.8 million, the National Clearing Company reported.
