PSX Falls Nearly 2,300 Points Amid Political and Geopolitical Tensions

The Pakistan Stock Exchange (PSX) remained under strong selling pressure on Monday amid rising geopolitical tensions and political uncertainty in the country. The benchmark KSE-100 Index fell nearly 2,300 points.

The index opened near 167,900 and initially moved lower. Attempts to recover failed to gain momentum, while selling intensified around midday. The index fell below 166,000 and reached an intraday low of 165,764.20 around 1pm.

The KSE-100 later staged a modest recovery and briefly moved above 166,000. However, renewed selling wiped out most of the gains before the close.

At the end of the session, the benchmark index settled at 165,867.31, down 2,288.18 points, or 1.36%.

Analysts linked the selling pressure to both domestic and global factors.

“Local political uncertainty, coupled with elevated oil prices, is weighing on investor sentiment and driving selling pressure across the market,” Saad Hanif, Head of Research at Ismail Iqbal Securities, told Business Recorder.

“The ongoing political noise has further encouraged a cautious approach, while higher oil prices are adding to concerns over inflation and macroeconomic stability,” he added.

Sana Tawfik, Head of Research at Arif Habib Limited, also highlighted similar concerns.

“Going forward, the market direction will be set by where oil prices head on the global front and whether political noise settles on the domestic front,” she said.

“Beyond that, the most important trigger will be the direction of the Monetary Policy Statement, whether the policy rate is kept unchanged or revised,” she added.

Selling was recorded in major sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration companies, OMCs, power generation and refineries.

Major stocks including PRL, NRL, HUBCO, MARI, OGDC, PPL, HBL, MEBL, NBP and UBL closed in negative territory.

During the previous week, the PSX also faced a major decline as stalled US-Iran negotiations, a global sell-off in sovereign fixed-income markets and a widening domestic trade deficit weakened investor confidence. The KSE-100 Index fell 2,609.74 points, or 1.5%, to close at 168,155.48 points.

In international markets, stocks started Monday on a stronger note, while the dollar weakened and bonds stabilised as investors reduced expectations of aggressive monetary tightening by the US Federal Reserve following weaker-than-expected US jobs data.

Investors are now pricing in a 22% chance of a Fed rate hike this month, compared with 64% a week earlier, according to the CME FedWatch tool.

The possibility of the Fed keeping rates unchanged helped Japan’s Nikkei rise 2%, while Australian stocks gained 0.5%. MSCI’s broadest index of Asia-Pacific shares outside Japan also rose 0.15%.

Nasdaq futures and S&P 500 futures gained 0.3% and 0.1%, respectively, while EUROSTOXX 50 futures rose 0.3% and FTSE futures increased 0.4%.