PSX Loses Ground Amid US Tariffs and Global Geopolitical Tensions

The Pakistan Stock Exchange (PSX) extended its losses on Tuesday as investor sentiment weakened due to rising government bond yields and policy uncertainty. Fresh developments in US tariffs and growing geopolitical tensions further added pressure on the market.

The PSX Benchmark KSE-100 Index traded between a high of 169,237.51 points (up 1,546.43 points, or 0.92%) and a low of 163,907.59 points (down 3,783.49 points, or 2.26%) compared to Monday’s close of 167,691.08 points.

“Stocks faced heavy selling after government bond yields surged in the recent SBP auction. The central bank’s policy tightening amid rising inflation and weak earnings forecasts triggered a sharp selloff,” said Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities.

He added, “US trade tariff uncertainty, geopolitical crises, and questions over the outcome of IMF’s third review talks acted as catalysts for the bearish trend at PSX.”

Impact of US Tariffs

New US tariffs on imported goods came into effect on Tuesday after President Donald Trump moved to reshape his trade agenda. The tariffs, initially set at 10%, may rise to 15% in the coming months. Sector-specific duties on steel and autos remain unchanged.

The US Customs and Border Protection also announced it would stop collecting tariffs invalidated by the Supreme Court ruling starting Tuesday. The duty is set to last 150 days, unless extended by Congress.

Geopolitical Concerns

Investors are also keeping a close watch on the US-Iran situation. Trump stated he would decide within 10-15 days whether to order strikes on Iran if nuclear negotiations fail. Reports suggest he has been presented with military options, including a direct attack on Iranian Supreme Leader Ayatollah Ali Khamenei.

Indirect talks between the US and Iran have already taken place in Oman and Switzerland. The next round is scheduled for Thursday in Switzerland, though major disagreements remain unresolved.

Domestic Economic Update

On the domestic front, Pakistan posted a current account surplus of $121 million in January, supported by strong remittances and lower imports. However, the cumulative balance for 7MFY26 showed a $1.07 billion deficit, compared with a $564 million surplus a year earlier. The widening deficit reflects rising imports while export growth remains moderate.

Weekly inflation, measured by the Sensitive Price Indicator (SPI), increased by 1.16% in the week ending February 19. SPI rose to 335.67 from 331.81, with year-on-year inflation at 5.19%, according to the Pakistan Bureau of Statistics.

On Monday, the KSE-100 Index plunged 5,478.63 points (3.16%), closing at 167,691.08, after moving between 174,336.86 and 166,886.63 points.