Stocks fall 1,581 points as Gulf tensions flare

Selling in bank, cement, oil & gas stocks weighs on market performance

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KARACHI:

Pakistan Stock Exchange (PSX) ended Wednesday's trading session on a weak note, where the benchmark KSE-100 index lost 1,580.90 points, or 0.89%, to settle at 176,042.99 amid renewed selling pressure.

The index remained in negative territory for most of the session, moving between the intra-day high of 176,935.03 and the low of 175,631.74. The KSE-100 earlier fell 1,297.67 points at 9:34am as investors reacted cautiously to geopolitical tensions and uncertain global market cues.

The negative sentiment deepened because of a sell-off in Asian equities, where concerns over the outlook for artificial intelligence-related investments weighed on the investor risk appetite. Meanwhile, oil prices jumped more than 4% as tensions in the Middle East mounted following US and Saudi strikes in Iraq and an intercepted Iranian missile attack on US forces, while a decline in US crude inventories also supported prices.

JS Global analyst Nawaz Ali attributed the market's decline to overnight exchanges of strikes between the US and Iran, which pushed oil prices higher and kept investors on the selling side. He said investors remained cautious, with some staying on the sidelines while others booked profits amid concerns that any further escalation in US-Iran tensions could weigh on the local market. "Investors may consider building positions on market dips; however, they should closely monitor geopolitical developments," Ali said.

According to KTrade Securities, trading activity remained subdued as the benchmark index's volumes eased to 193 million shares. Selling pressure persisted throughout the session, particularly in heavyweight sectors such as commercial banks, cement and oil & gas. Engro Holdings, Lucky Cement, United Bank, Hub Power, Pakistan Petroleum and Meezan Bank were among the major negative contributors while the market lacked strong buying interest.

Globally, oil prices surged nearly 4% overnight following reports of retaliatory strikes involving the US and the Royal Saudi Air Force, raising concerns over potential supply disruptions and renewed geopolitical tensions, which added another layer of uncertainty for investors despite generally supportive domestic fundamentals.

Going forward, KTrade expected the market direction to remain linked to geopolitical developments, particularly movements in crude prices, while the ongoing corporate earnings season would continue to influence stock-specific sentiment.

Overall trading volumes hit 574 million shares compared with Tuesday's total of 958 million. The value of traded shares stood at Rs25.4 billion.

Foreign investors bought shares worth Rs152.8 million.