Bearish bias persists amid geopolitical tensions
KARACHI: The Pakistan Stock Exchange (PSX) came under pressure on Thursday as the benchmark KSE-100 index fell to levels seen before the start of the Middle East conflict, signalling weakening investor confidence. Steep nervousness amid elevated oil prices remained the key factor threatening macroeconomic stability, as costly energy imports continued to weigh on the cost of doing business.…
On Thursday, the Pakistan Stock Exchange (PSX) experienced a significant decline as the benchmark KSE-100 index plummeted, mirroring levels witnessed prior to the commencement of the Middle East conflict. The chief catalyst behind this unsettling market sentiment was the pervasive sense of nervousness fueled by skyrocketing oil prices, which continue to burden the cost of doing business due to expensive energy imports.
Topline Securities Ltd reported that the KSE-100 index commenced the session with a surge, momentarily surpassing the 170,000 mark, but ultimately succumbed to profit-taking and widespread selling later in the day, culminating in a 1,332.47-point drop, or 0.78 percent, bringing the index down to 168,636.85.
Key contributors to the bearish trend included Pakistan Petroleum, United Bank, Hub Power, Oil and Gas Development Company, and Fauji Fertiliser, whose collective actions resulted in a loss of approximately 470 points. The widespread sell-off was observed across various sectors, including banks, energy producers, cement manufacturers, and oil and gas companies, indicative of a cautious trading atmosphere.
Notably, the index momentarily breached the 170,000 level before closing at 168,636, reflecting subdued market volumes. Investor participation was markedly subdued, with a 7.24 percent decline in trading volume, falling to 548.4 million shares, and a 15.54 percent drop in turnover value to Rs17.05 billion.
Arif Habib Ltd (AHL) noted a distinctly negative market breadth, characterized by 14 shares gaining value while 86 fell. Among the few bright spots were Kohinoor Textile Mills (1.02 percent gain), Service Industries (0.26 percent gain), and Attock Refinery (0.21 percent gain). The sharp sell-off coincided with the release of fresh inflation data, which revealed that headline inflation surged to 10.3 percent year-on-year, a substantial increase from 5.8 percent in September 2025.
Consequently, the average inflation rate for the first quarter of FY27 has risen to 10.21 percent, from 4.30 percent in the same period the previous year. In an effort to alleviate the situation, the government is engaged in negotiations with Iranian counterparts to ensure a secure passage for two shipments of Qatari liquefied natural gas through the Strait of Hormuz.
Despite this, AHL affirmed that the prevailing market sentiment is decidedly bearish, with the 166,000 level appearing to be a clear target.
Written by urgent.news from Dawn Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
