Market reverses early gains as fading peace hopes, rising oil prices unsettle investors
KARACHI:
The Pakistan Stock Exchange (PSX) witnessed a sharp reversal on Tuesday as the benchmark KSE-100 Index, which started trading positively, turned negative within minutes and later plunged 2,546.94 points, or 1.41%, to settle at 177,955.51 as heightened regional uncertainty, rising oil prices and fresh domestic developments unsettled investors.
The Index initially climbed to an intraday high of 180,602.44 but quickly lost momentum. Selling intensified during the session, taking the benchmark to a low of 177,866.04.
The early reversal reflected fragile investor sentiment amid fading prospects for a US-Iran peace agreement and a renewed rise in international oil prices, which moved to near three-week highs on concerns over supply risks.
The KSE-100 had already shown signs of weakness in morning trading. Soon after the opening, the Index reached 178,956.92, down 1,545.52 points, or 0.86%, before losses widened as the session progressed.
Selling spread across major sectors, including commercial banks, oil and gas exploration companies, oil marketing companies, cement, automobile assemblers and power generation.
Read: Refinery stocks take PSX up by 398 points
The sharp decline marked a broad retreat from the previous session’s close of 180,502.44, with the benchmark ending the day below the 178,000 level.
According to Ahmed Sheraz of KASB KTrade, the KSE-100 Index closed at 177,955 points, down 2,547 points, or 1.41% day-on-day, marking a sharp reversal after recent gains.
The decline was broad-based, with selling pressure seen across commercial banks, oil and gas, fertilisers, cement, investment companies and power stocks.
Major Index heavyweights, including United Bank, Fauji Fertiliser, Meezan Bank, Engro Holdings, Oil & Gas Development Company, Pakistan Petroleum, Hub Power and Mari Energies, remained under pressure and contributed significantly to the benchmark’s decline.
Sheraz said market sentiment remained cautious amid a combination of external and domestic developments. Rising oil prices and the overnight expiry of the US-Iran ceasefire added to uncertainty surrounding the global geopolitical environment, while the absence of a fresh positive catalyst kept buying interest subdued.
On the domestic front, developments surrounding the former prime minister’s transfer from jail to hospital for medical treatment also contributed to a more cautious risk environment.
He said these factors, coupled with profit-taking in major Index heavyweights, resulted in a broad-based market decline during the session.
Read more: Oil prices at near three-week high as US-Iran peace hopes fade
Looking ahead, Sheraz expects the market to remain under pressure in the near term, with fresh buying likely to remain selective until the Index establishes a firm base around current support levels.
He advised investors to avoid aggressive buying and closely monitor the 178,000 level, warning that a sustained break below this level could further weaken market sentiment.
Overall, trading volume slightly decreased to 1.03billion against Monday’s closing volume of 1.04billion. The value of traded shares stood at Rs50.7billion.
In the ready market, shares of 494 Companies were traded. Of these, 104 stocks jumped, 368 fell and 22 remained unchanged.
Cnergyico PK was the volume leader with trading in 231.5million shares, losing Rs0.22 to close at Rs14.79.
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