Rising oil prices and geopolitical uncertainty weigh on investor confidence at the PSX
KARACHI: The Pakistan Stock Exchange (PSX) extended its losses on Thursday, with the benchmark KSE-100 Index plunging 2,690 points as escalating tensions between the United States and Iran sparked broad-based selling and weakened investor confidence.
The benchmark index closed at 171,739 points, down 2,690 points, or 1.54%, after remaining under pressure throughout the trading session. During intraday trading, the market fell by as much as 2,774 points before recovering modestly by the close.
Rising oil prices fuel market concerns
Investor sentiment remained fragile as fears of a broader conflict in the Middle East drove international oil prices sharply higher.
WTI crude oil climbed to around $90 per barrel, raising concerns over higher inflation, an increasing import bill and additional pressure on Pakistan’s external account.
Analysts said investors adopted a risk-averse stance amid uncertainty surrounding the geopolitical outlook, with higher energy prices expected to complicate Pakistan’s macroeconomic environment.
Blue-chip stocks lead declines
Heavyweight stocks accounted for a significant portion of the benchmark’s losses.
Among the biggest negative contributors were United Bank Limited (UBL), Fauji Fertilizer Company (FFC), Engro Holdings (ENGROH), Lucky Cement (LUCK) and Hub Power Company (HUBC), which collectively erased around 1,101 points from the KSE-100 Index.
The broad-based decline reflected cautious investor positioning as market participants reduced exposure to equities amid rising geopolitical risks.
Trading activity slows
Trading activity also weakened as investors largely remained on the sidelines.
A total of 525 million shares changed hands during the session, while the total traded value stood at approximately Rs23.4 billion.
Cnergyico (CNERGY) emerged as the most actively traded stock, with nearly 60 million shares exchanged.
Outlook
Analysts expect the KSE-100 Index to remain volatile in the near term as investors continue to monitor developments in the Middle East and their impact on global energy markets.
Movements in international crude oil prices, geopolitical developments and domestic policy measures aimed at maintaining economic stability are expected to remain the key drivers of market sentiment in the coming sessions.