Volatility at PSX, KSE-100 closes week lower

The Pakistan Stock Exchange (PSX) experienced a volatile trading session on Friday, with the benchmark KSE-100 Index swinging both ways before closing with a loss of over 700 points.

After opening on a weak note, the index came under intense selling pressure during the morning session, dragging it to an intra-day low of 169,512.88.

Buying interest emerged in the second half of the trading session, helping the benchmark gradually recover its losses.

Momentum accelerated in the afternoon, lifting the index to an intra-day high of 172,718.66, as investors accumulated select heavyweight stocks. However, the rally proved short-lived, with renewed profit-taking erasing much of the day’s gains in late trade.

At close, the KSE-100 Index settled at 171,021.20, down 718.24 points, or 0.42%.

Top negative contribution to the index came from UBL, NBP, SYS, HBL and FFC, as they cumulatively weighed down on the index by 436 points, brokerage house Topline Securities said in its post-market report.

On Thursday, PSX remained firmly under bearish pressure with the Index plunging as intensifying geopolitical tensions between the United States and Iran, coupled with a sharp rally in international crude oil prices, triggered widespread risk aversion and heavy selling across key sectors. Reflecting the broad-based sell-off, the KSE-100 Index shed 2,690.48 points, or 1.54%, to settle at 171,739.45 points.

On a weekly basis, the KSE-100 Index declined by 2.7%, as “continued escalation in tensions between the US and Iran pushed crude oil prices higher, dampening investor sentiment,” Topline said.

Globally, Asian shares fell on Friday as oil prices stormed back above $100 a barrel amid an intensifying ​conflict in the Gulf, rattling bond markets and reviving fears of a fresh inflation shock.

Brent crude held at $100.85 a barrel, after surging ‌7% overnight to a two-month high of $102 as attacks by Iran-aligned Houthis on Saudi tankers in the Red Sea choked off a second crucial Middle East artery for global oil supplies, alongside Iran’s near-closure of the Strait of Hormuz.

Two weeks since the effective collapse of an interim truce meant to end the war, the US military launched air strikes on Iran into Friday ​morning while Tehran fired at neighbouring Arab countries that host U.S. bases. With the conflict showing few signs of abating, Brent has soared nearly ​40% this month alone.

News that the U.S. administration will impose higher tariffs on goods from 60 trading partners also did not help the inflation picture, with 30-year Treasury yields nearing their highest levels since 2007 and benchmark European borrowing costs climbing to highs last seen in 2011.

Markets bet central banks will have to turn more hawkish, with a one-in-three chance of ​a rate hike from the Federal Reserve as soon as next week — a sea change from merely a week ago — while a move in September is ​more than fully priced in.

The European Central Bank left rates unchanged overnight, but a September rate hike is about 70% priced in.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside ‌Japan, fell ⁠1%, and Japan’s Nikkei slid 2.9%. South Korea’s KOSPI dropped 3.7%.

Meanwhile, the Pakistani rupee extended its marginal gains, appreciating 0.01% against the US dollar on Friday. The local unit closed the day at 277.87, a gain of Re0.03 against the greenback.

Volume on the all-share index increased to 579.94 million from 525.12 million recorded in the previous close.

The value of shares rose to Rs23.89 billion from Rs23.43 billion in the previous session.

Cnergyico PK was the volume leader with 59.33 million shares, followed by Trust Brokerage with 36.98 million shares, and Kohinoor Spining with 32.63 million shares.

Shares of 492 companies were traded on Friday, of which 186 registered an increase, 270 recorded a fall, and 36 remained unchanged.