Index reverses gains as fading peace hopes, political developments impact sentiment
KARACHI:
Pakistan Stock Exchange (PSX) on Tuesday witnessed a sharp reversal of fortunes as the KSE-100 index, which started trading on a positive note, turned negative within minutes and plunged 2,546.94 points, or 1.41%, to close at 177,955.51 as regional uncertainty, high oil prices and fresh domestic developments forced investors to exercise caution.
The index initially climbed to the intra-day high of 180,602.44 but quickly lost momentum. Selling intensified later in the session, taking the market to the low of 177,866.04. Fading US-Iran peace hopes and rising oil prices weighed on sentiment, while investors closely watched political developments after a court ordered former PM Imran Khan’s transfer to a hospital for treatment. The KSE-100 had already shown signs of weakness in morning trading. Soon after the opening, the index reached 178,956.92, down 1,545.52 points, or 0.86%, before losses deepened as the session progressed. Selling spread across sectors like commercial banks, oil and gas exploration, oil marketing, cement and power generation.
According to Ahmed Sheraz of KASB KTrade, the KSE-100 closed down by 2,547 points, or 1.41%, marking a sharp reversal after recent gains. The decline was broad-based, with selling pressure seen across commercial banks, oil and gas, fertiliser, cement, investment companies and power stocks. Major heavyweights including United Bank, Fauji Fertiliser, Meezan Bank, Engro Holdings, Oil & Gas Development Company, Pakistan Petroleum, Hub Power and Mari Energies remained under pressure and contributed significantly to the benchmark’s decline.
Sheraz said the market remained cautious amid a combination of external and domestic developments. Rising oil prices and the overnight expiry of US-Iran ceasefire added to uncertainty surrounding the geopolitical environment, while the absence of a fresh positive catalyst kept buying interest subdued. On the domestic front, developments surrounding the former prime minister’s transfer from jail to hospital for medical treatment also contributed to a more cautious risk environment. He said those factors, coupled with profit-taking in major heavyweights, resulted in a broad-based market decline.
Looking ahead, Sheraz expected the market to stay under pressure in the near term, with fresh buying likely to be selective until the index established a firm base around current support levels. He advised investors to avoid aggressive buying and closely monitor the 178,000 level, warning that a sustained break below that level could further weaken market sentiment. Arif Habib Limited (AHL) Deputy Head of Trading Ali Najib observed that the market opened on a positive note, briefly touching the intra-day high of 180,602 (+100 points, or 0.06%). However, mounting tensions between the US and Iran, coupled with aggressive statements from both sides, pushed international oil prices higher and weighed on investor sentiment, which triggered broad-based profit-taking.
On the sectoral front, power demand rebounded 7.1% year-on-year to 15,122 GWh in July 2026, standing 2.3% above the seven-year July average, signalling improving power-sector activity and broader economic growth. UBL, Fauji Fertiliser, Meezan Bank, Engro Holdings, OGDC, Pakistan Petroleum, Hubco, Mari Energies, MCB and Lucky Cement collectively erased 1,465 points from the index.
Market activity remained strong, with traded volumes reaching 1.04 billion shares and traded value at Rs50.7 billion. “Going forward, heightened volatility and selective profit-taking is expected, where geopolitical developments and oil prices will remain key drivers of market direction,” Najib added.
Overall trading volumes slightly decreased to 1.04 billion shares against Monday’s tally of 1.05 billion. The value of traded shares stood at Rs50.7 billion.
In the ready market, shares of 494 companies were traded. Of these, 104 stocks jumped, 368 fell and 22 remained unchanged.
Cnergyico Pk was the volume leader with trading in 231.5 million shares, losing Rs0.22 to close at Rs14.79. Foreign investors bought shares worth Rs351 million, the National Clearing Company reported.
