Pak-Afghan tensions dent investor sentiments, KSE-100 sheds over 4,500 points

Cross-border escalation between Pakistan and Afghanistan dented investor sentiments at the Pakistan Stock Exchange (PSX), with the benchmark KSE-100 shedding over 4,500 points during trading on Monday.

Selling pressure persisted throughout the session, with the KSE-100 Index hitting an intra-day low of 157,678.01.

At close, the benchmark index settled at 158,443.42, down by 4654.77 points or 2.85%.

Earlier, selling pressure was observed in key sectors including automobile assemblers, cement, commercial banks, fertiliser, oil and gas exploration companies, OMCs, refinery and power generation. Index-heavy stocks including HUBCO, MARI, OGDC, PPL, POL, HBL and UBL, traded in the red.

“The selling pressure is mainly due to the developments over the weekend, including geopolitical factors and cross-border tensions,” Sana Tawfik of Arif Habib Limited (AHL), told Business Recorder.

The analyst added that global equities have also come under pressure.

Waqas Ghani, Head of Research at JS Global, echoed similar views, saying that the market is down due to weak investor sentiment following cross-border tensions between Pakistan and Afghanistan.

“Investors remain cautious amid heightened geopolitical uncertainty and profit-taking after recent gains,” he added.

At least 23 Pakistani soldiers were martyred and over 200 militants killed in intense overnight clashes along the Pak-Afghan border, following the unprovoked attack launched from Afghan territory, the Inter-Services Public Relations (ISPR) said in a statement on Sunday.

According to the military’s media wing, the fighting broke out late Saturday night after an unprovoked offensive by Afghan Taliban fighters and affiliated militant groups, including the banned Tehreek-e-Taliban Pakistan (TTP).

During the previous week, the PSX saw declines across most sectors, reduced trading volumes, and weaker capitalisation following several weeks of sustained advances. The benchmark KSE-100 Index declined 3.5% to settle at 163,098.19 points.

Globally, Asian stocks got off to a rocky start on Monday after fresh broadsides in the US-China trade war spooked markets with already stretched valuations, though there were signs risk sentiment had steadied with Wall Street futures bouncing.

A holiday in Japan and the United States made for choppy early trading, and political uncertainty still shrouded Japanese and European assets.

While US President Donald Trump had threatened 100% tariffs on China from November 1, he sounded more conciliatory over the weekend, posting that everything would be fine and the US didn’t want to “hurt” China.

Beijing on Sunday defended its curbs on exports of rare earth elements and equipment as a response to US aggression, but stopped short of imposing new levies on US products.

Many world leaders, including Prime Minister Shehbaz Sharif, are due to meet in Egypt on Monday to discuss ceasefire plans for Gaza.

Japanese markets had their own problems with the ascension of new LDP leader Sanae Takaichi to prime minister, now in doubt, contributing to a sharp rebound in the yen and a 5% dive in Nikkei futures on Friday.

The Nikkei was closed on Monday. Futures were trading up 1.3% at 46,690, but that was still far below the cash close of 48,088.

Shares in South Korea slid 2.1%, while Australia lost 0.5%. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.6%.

Meanwhile, the Pakistani rupee posted marginal gain against the US dollar in the inter-bank market on Monday. At close, the local currency settled at 281.16, up by Re0.01 against the previous session’s close of 281.17, according to State Bank of Pakistan (SBP) data.

Volume on the all-share index decreased to 1,365 million from 1,401 million recorded in the previous close. The value of shares increased to Rs62.46 billion from Rs47.79 billion in the previous session.

K-Electric Ltd was the volume leader with 197.27 million shares, followed by B.O.Punjab with 97.21 million shares, and WorldCall Telecom with 75.24 million shares.

Shares of 482 companies were traded on Monday, of which 74 registered an increase, 375 recorded a fall, and 33 remained unchanged.