KARACHI:

The Pakistan Stock Exchange (PSX) endured a sharp sell-off on Thursday, when the benchmark KSE-100 index plunged 3.41%, erasing the previous session’s gains amid rising geopolitical uncertainty and persistent technical weakness.

The decline was driven by negative global cues, particularly a sharp spike in Brent crude from $95 to nearly $100 per barrel, raising concerns about Pakistan’s inflation and external account outlook, noted KTrade Securities.

Geopolitical tensions further escalated after Iran reportedly rejected US proposals, which dampened hopes for a near-term resolution. Persistent institutional selling added to the pressure, with foreigners remaining net sellers and mutual funds continuing to offload positions. At close, the KSE-100 index posted a sharp decline of 5,405.48 points and settled at 152,907.97.

Market breadth remained negative as 92 stocks declined while only seven advanced, reflecting weak investor sentiment, according to Arif Habib Limited (AHL). Heavyweight stocks led the downturn, with UBL falling 7.07%, FFC shedding 2.84% and Engro Holdings declining 3.97%. Traded value in the ready market stood at $92.7 million and volumes clocked in at 521.6 million shares.

Analysts attributed the bearish activity primarily to escalating geopolitical tensions in the Middle East. Reports of indirect US-Iran engagement through backchannel diplomacy failed to reassure investors, as conflicting signals from both sides clouded expectations of any near-term de-escalation.

“Middle East developments continue to act as the primary trigger for equity markets, and the absence of a clear resolution path is keeping risk appetite subdued,” a market participant noted.

On the domestic front, the index’s failure to reclaim its 200-day moving average has reinforced the consolidation phase, with the benchmark remaining largely flat on a week-on-week basis despite heightened volatility.

Additionally, policy developments added a mixed undertone to the market. The government’s plan to introduce a mobile application to manage fuel quotas for motorcycles, rickshaws, and small cars up to 800cc – aimed at providing targeted subsidies to low-income households – failed to provide any immediate positive trigger for equities.

Sector-wise, banking, cement, and exploration & production stocks remained under pressure. Among actively traded stocks, Sui Northern Gas Pipelines, WorldCall Telecom, and Pak Elektron featured prominently in volumes. On the flip side, select stocks posted gains, with Nestle Pakistan, Packages Limited, and Bata Pakistan closing in the green, although their impact on the broader index remained limited.

Topline in its market review said the KSE-100 index experienced sustained selling pressure throughout the day, where the index predominantly traded in the negative territory as investors remained cautious amid persistent volatility in international oil prices and ongoing global uncertainty. Key index-heavy stocks, including UBL, FFC, Engro Holdings, Lucky Cement and Hubco, acted as major drags on the market, collectively pulling the index down by 2,138 points.

On the volumes front, K-Electric led the activity, with over 96 million shares traded during the day. The total traded volume for the session stood at 521 million shares, while the traded value was recorded at Rs27 billion, Topline said.

On the ready market, shares of 484 companies were traded. Of these, 71 stocks closed higher, 356 fell, and 57 remained unchanged.

K-Electric was the volume leader with trading in 96.74 million shares, losing Rs0.74 to close at Rs7.06. It was followed by First National Equities with 33.02 million shares, losing Rs0.05 to close at Rs1.18, and Unity Foods with 25.12 million shares, losing Rs0.31 to close at Rs8.26. Foreign investors bought shares worth Rs441.8 million, the National Clearing Company reported.