The Pakistan Stock Exchange (PSX) experienced a turbulent trading session on Thursday as the benchmark KSE-100 index recorded a notable loss of 463 points, closing the day at 120,003. The drop came in contrast to early trading optimism and was largely attributed to heightened geopolitical instability and global market volatility that weighed heavily on investor confidence.
According to a session report by Topline Securities Limited, the day began on a promising note. Investor sentiment received an initial boost following the federal cabinet’s long-awaited approval of a financial restructuring plan aimed at reducing Pakistan’s circular debt burden. The ambitious roadmap sets out to cut Rs1.275 trillion in circular debt over a six-year period, a significant structural reform that the market had been anticipating.
Fueled by this development, the KSE-100 index surged by as much as 1,279 points in intraday trade. The initial rally reflected investor optimism around the plan’s potential to address Pakistan’s longstanding energy sector inefficiencies and macroeconomic imbalances. However, this rally proved short-lived as aggressive profit-taking emerged mid-session, erasing early gains and pushing the index sharply into the red.
The reversal was not driven solely by local dynamics. Mounting geopolitical tensions, particularly the escalating hostilities between Iran and Israel, cast a long shadow over global equity markets. With investors shifting into risk-averse mode, emerging markets like Pakistan saw capital outflows and reduced risk appetite, contributing to the decline in the KSE-100 index. Analysts noted that the domestic equity market, which remains sensitive to regional disruptions, responded quickly to these global tremors.
Despite the negative close, several blue-chip banking stocks provided some buffer to the index. United Bank Limited (UBL), Bank AL Habib (BAHL), MCB Bank, and Habib Metropolitan Bank (HMB) collectively contributed 203 points to the KSE-100. Their relative resilience helped prevent a deeper market slide.
However, these gains were outweighed by losses in heavyweight industrial and energy stocks. Declines in Pakistan GasPort (PKGP), Engro Fertilizers (EFERT), Engro Corporation (ENGROH), and Lucky Cement (LUCK) dragged the index down by a combined 270 points, negating the banking sector’s positive performance.
Market activity remained robust, suggesting that while sentiment was cautious, investor engagement did not wane. Total trading volumes reached 598 million shares, while the traded value stood at a healthy Rs20.3 billion. WorldCall Telecom (WTL) emerged as the most actively traded stock with 64 million shares changing hands during the session.
Market watchers caution that short-term volatility is likely to persist, with geopolitical developments and global financial cues continuing to exert a strong influence on investor decisions. While the approval of structural reforms offers a longer-term bullish outlook for the domestic market, external shocks remain a dominant risk factor in the immediate horizon.
As uncertainty prevails across global markets, the PSX remains tethered to regional developments and investor perceptions of political stability, making the coming sessions critical in determining whether confidence can be restored or further downside pressure is on the horizon.