Sentiments drive trading at bourse, KSE-100 settles 1% lower

The Pakistan Stock Exchange (PSX) saw a highly volatile, sentiment-driven trading session on Monday, with the benchmark KSE-100 Index swinging both ways before closing 1% lower.

The KSE-100 experienced a steep drop right after the open, triggered by negative external cues or geopolitical concerns. However, this dip was short-lived as the market quickly rebounded and moved into positive territory, amid institutional buying.

The index then trended upward steadily, hitting the intra-day high of 174,523.76.

Sentiments shifted again around mid-day, and the market witnessed a sharp sell-off, dropping to an intra-day low of 169,226.56 amid reports that the Iranian delegation will not visit Pakistan for talks with the US.

The market stabilised, albeit partially, during the final hours of trading.

At close, the benchmark index settled at 172,196.70, down by 1,742.31 points or 1%.

“Investor sentiment remained cautious amid escalating geopolitical tensions. Concerns intensified following reports that the United States seized an Iranian-flagged cargo vessel in the Strait of Hormuz, while Iran signalled that no further round of talks is currently planned. Earlier indications of potential diplomatic engagement, including the possibility of a US delegation visiting Islamabad, were overshadowed by these developments,” brokerage house Topline Securities said in its post-market report.

Index-heavy stocks, including FFC, HBL, HUBC, LUCK, and ENGROH, remained under significant selling pressure, collectively dragging the benchmark index down by 905 points.

Market analysts attributed the selling pressure to geopolitical developments, as reports suggested that the Iranian delegation is not willing to come to Pakistan for the second round of talks.

“Confidence remains fragile amid renewed uncertainty, as Iran has yet to confirm participation in the second round of US–Iran talks expected in Islamabad tomorrow,” said Waqas Ghani, Head of Research at JS Global, told Business Recorder.

During the previous week, PSX maintained its bullish trajectory as improving geopolitical conditions and investor confidence fuelled broad-based buying. The benchmark KSE-100 Index surged by 4%, gaining 6,748 points to settle at 173,939 points.

Internationally, oil prices jumped, the US dollar lifted from lows and stock markets wobbled on ​Monday as rising tension in the Middle East kept shipping in and out of the Gulf to a bare ‌minimum, though traders were holding out hope for a resolution.

The ceasefire in the Iran war, due to run until Tuesday, was in doubt after the US seized an Iranian cargo ship and Tehran’s top military command vowed to retaliate.

Iran has re-imposed its de facto closure of the Strait of Hormuz, ​though Kpler data showed that more than 20 vessels carrying oil products, metals, gas and fertiliser passed through it on ​Saturday, the busiest day for the chokepoint since March 1.

Brent crude futures jumped about 6% to $96 a ⁠barrel in early Asia trade. The dollar, which sold off sharply on Friday when the strait briefly opened, rose slightly.

S&P 500 ​futures fell around 0.7%, a modest move considering the index notched a record closing high on Friday. Asia-Pacific markets were mixed, with Australia’s ​S&P/ASX 200 down 0.5% and Japan’s benchmark Nikkei up 0.7%.

Bond markets, which rallied on Friday, retreated.

Iran ​rejected new peace talks with the US, its state news agency reported on Sunday, hours after US President Donald Trump said he was sending envoys ‌for ⁠talks in Pakistan and would launch new strikes on Iran unless it accepts his terms.

Meanwhile, the Pakistani rupee registered marginal gain against the US dollar in the inter-bank market on Monday. At close, the local currency settled at 278.91 against the greenback, according to the State Bank of Pakistan (SBP).

Volume on the all-share index dropped to 1,296.21 million from 1,440.63 million recorded in the previous close.

The value of shares decreased to Rs65.27 billion from Rs67.99 billion in the previous session.

B.O.Punjab was the volume leader with 120.58 million shares, followed by Unity Foods Ltd with 92.48 million shares, and K-Electric Ltd with 85.68 million shares.

Shares of 488 companies were traded on Monday, of which 138 registered an increase, 319 recorded a fall, and 31 remained unchanged.