By Moaaz Manzoor

The Pakistan Stock Exchange (PSX) remained under pressure during the week, as escalating geopolitical developments and a sharp increase in fuel prices dampened investor sentiment, reports Wealth Pakistan.

The benchmark KSE-100 Index closed at 150,399 points, down 0.9% week-on-week, shedding 1,309 points. The market remained highly volatile, touching an intra-week high of 157,347 points and a low of 144,657 points, amid persistent selling pressure.

According to Arif Habib Limited, the negative contribution to the index was led by Fertilizer (-517 points), followed by Investment Banks (-514 points), Technology (-176 points), Oil Marketing Companies (-140 points), and Cement (-118 points). On the positive side, Banks added 420 points, followed by Refinery (141 points), Exploration and Production (134 points), Glass & Ceramics (24 points), and Insurance (22 points).

On a scrip-wise basis, United Bank Limited (-534 points) emerged as the largest drag on the index, followed by Engro Holdings (-478 points), Fauji Fertilizer Company (-363 points), Systems Limited (-131 points), and Pakistan State Oil (-116 points). In contrast, Meezan Bank (308 points), Bank AL Habib (269 points), Habib Bank Limited (248 points), Bank Alfalah (157 points), and Lucky Cement (134 points) provided support to the index.

Trading activity showed a modest uptick during the week. Average daily volumes rose 1.2% week-on-week to 492 million shares, while average traded value increased 3.3% to $100.5 million, indicating continued investor participation despite weak sentiment.

During the week, the market also experienced a sharp decline following the government’s decision to withdraw fuel subsidies. According to Topline Securities, the index declined by 1.06% to close at 150,399 points after the announcement, as diesel prices were increased by 55% and petrol prices 43%, intensifying concerns over inflation and the interest rate outlook.

Speaking with Wealth Pakistan, Syed Zafar Abbas, Manager at Zahid Latif Securities, said the market remained highly volatile, with sentiment shifting in response to each geopolitical development. He noted that the index has declined by around 40,000 points from its peak, reflecting sustained pressure.

Abbas warned that rising energy prices linked to tensions involving the US, Israel, and Iran could push inflation to 7–8%, and potentially towards 10% if global volatility persists, while also increasing risks for the rupee and interest rates.

Ali Najib, Deputy Head of Trading at Arif Habib Limited, said the market came under pressure as investors reacted to the fuel price hike, which is expected to translate into higher inflation and tighter monetary conditions. He added that UBL, ENGROH, FFC, SYS, and LUCK collectively eroded around 1,100 points from the index during the session.

On the macro front, the government increased petrol prices to PKR 458.4 per litre and diesel to PKR 520.35 per litre, shifting from a blanket subsidy to a more targeted approach. The subsidy had been maintained for three weeks at an estimated cost of PKR 129 billion ($462 million).

Market breadth remained weak, with 21 advancing stocks against 79 decliners, indicating broad-based selling pressure. Overall activity stayed moderate, with 469.3 million shares traded and turnover of PKR 24.6 billion. CNERGY led the volumes chart with 97.2 million shares.

Looking ahead, analysts expect market direction to remain closely tied to geopolitical developments in the Middle East and the start of the March quarter-end results season. They believe continued tensions may keep sentiment subdued, while any de-escalation could trigger a recovery, with 150,000 points seen as a key support level.

Credit: INP-WealthPk