KSE-100 sheds over 3% amid geopolitical uncertainty

The Pakistan Stock Exchange (PSX) witnessed heavy selling pressure throughout the session, with the benchmark KSE-100 dropping over 3% or 6,000 points on Thursday amid heightened geopolitical uncertainty and a recent uptick in oil prices.

The benchmark index opened on a weak note and remained under pressure for most of the day, slipping steadily as investor sentiment deteriorated.

Selling further intensified in the early afternoon, triggering a sharp drop, dragging the benchmark index to an intra-day low of 181,961.14, before a mild rebound helped trim some losses in the final hour of trading.

At close, the KSE-100 settled at 182,338.12, a decrease of 6,042.26 points or 3.21%.

Analysts attributed the selling pressure to rising tensions between US and Iran and an increase in global oil prices.

“Geopolitical developments and the recent uptick in oil prices are reinforcing market expectations that interest rate easing will be delayed further due to elevated uncertainty,” Saad Hanif, Head of Research at Ismail Iqbal Securities, told Business Recorder.

Apart from geopolitical tensions, the latest financial results of Fauji Fertilizers Limited were “below expectations”, said Sana Tawfik, Head of Research at Arif Habib Limited.

“Across-the-board selling is observed due to uncertainty amid geopolitical issues,” she added.

Meanwhile, Topline Securities said the steep decline was largely driven by Fauji Fertilizer Company’s (FFC) earnings announcement, which “fell short of market expectations due to weaker-than-anticipated gross margins”.

“Furthermore, market speculation had fueled expectations of a stock split or bonus issue—neither of which materialised. This divergence between investor expectations and actual outcomes triggered panic selling, as participants rushed to lock in recent gains, exacerbating the downward momentum.”

Heavyweight stocks including FFC, UBL, ENGROH, OGDC, and HUBC were the primary laggards, collectively shaving 3,155 points off the benchmark index during the session, Topline said.

In another development, various trade bodies have expressed serious concern over the likely impact of the proposed India–European Union Free Trade Agreement (FTA) on the country’s textile and hosiery exports, warning that it would place Pakistan at a structural disadvantage despite its existing GSP+ status with the EU.

On Wednesday, PSX closed the session marginally higher as select buying in energy, power generation and banking stocks helped benchmark indices end in positive territory, despite persistent volatility and broadly negative market breadth across cash and futures segments. The benchmark KSE-100 Index rose by 177.53 points, or 0.09%, to close at 188,380.39 points.

Internationally, Asia’s runaway stock markets took a breather on Thursday as mixed earnings out of the tech sector ​stirred caution ahead of Apple’s results, while the dollar looked shaky despite verbal support from both US and European officials.

Gold and silver climbed ‌to all-time highs as investors continued their rush into physical assets, and oil prices hit a four-month top as US President Donald Trump warned Iran of possible attacks if it did not make a deal on nuclear weapons.

The US Federal Reserve kept interest rates on hold as widely expected, while Chair Jerome Powell talked of a “clearly improving” economic outlook and broad support on the committee for a pause.

Powell would not be drawn on whether he would remain as a governor after he steps down as Chair in May, given Trump’s efforts ‌to pressure the Fed into more aggressive cuts.

Investors reacted by further paring the chance of another policy easing by April ​to 26%, with June seen as the next likely window at 61%.

Meanwhile, the Pakistani rupee registered marginal improvement against the US dollar in the inter-bank market on Thursday. At close, the local currency settled at 279.80, a gain of Re0.01 against the greenback.

Volume on the all-share index decreased to 933.10 million from 953.92 million recorded in the previous close. The value of shares increased to Rs66.41 billion from Rs48.88 billion in the previous session.

K-Electric Ltd was the volume leader with 104.16 million shares, followed by WorldCall Telecom with 48.36 million shares, and B.O.Punjab with 31.35 million shares.

Shares of 487 companies were traded on Thursday, of which 83 registered an increase, 364 recorded a fall, and 40 remained unchanged.