The Pakistan Stock Exchange (PSX) witnessed another volatile session on Tuesday as the benchmark KSE-100 Index lost momentum after an early rally, shedding nearly 400 points by the close of trading. The selling pressure highlighted ongoing investor caution, with profit-taking emerging as the dominant theme across key sectors.
Trading began on a positive note, with the KSE-100 Index reaching an intra-day high of 149,453.19 points. However, this optimism quickly faded as profit-taking set in, dragging the index down to an intra-day low of 148,312.57. By the end of the session, the index settled at 148,435.06, marking a decline of 380.24 points or 0.26%.
The pullback comes on the heels of Monday’s session, when the KSE-100 Index had already come under heavy pressure, losing 677.75 points or 0.45% to close at 148,815.31. Analysts attributed the recent downturn to a combination of rollover week activity and cautious sentiment among institutional investors, who opted to book gains amid global market jitters.
International developments added further unease to the local market mood. Asian equities mirrored losses on Wall Street after US President Donald Trump announced the dismissal of Federal Reserve Governor Lisa Cook, a move that shocked global investors. The unprecedented decision has raised concerns over the independence of the Federal Reserve and cast fresh doubts on the stability of US monetary policy.
Global currency markets also reacted sharply to the development. The US dollar weakened against major currencies such as the yen and euro following Trump’s announcement. His letter, posted on the Truth Social platform, alleged improprieties in Cook’s mortgage loan applications and claimed she had provided false information. The removal not only escalated tensions between the White House and the Fed but also injected new volatility into global asset markets.
The ripple effects were visible across Asia, where MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.6%. Japan’s Nikkei index fell 1.1%, reflecting heightened investor concern. Futures markets suggested the nervous trend would likely continue in Europe and the US, with Euro Stoxx 50 futures down 0.57%, German DAX futures off by 0.42%, FTSE futures lower by 0.35%, and US S&P 500 e-minis dipping 0.17%.
For Pakistan, these external factors combined with local profit-taking to weigh down the KSE-100 Index. Market participants remain alert to both domestic earnings season trends and international shocks, making short-term volatility a recurring feature of trading activity.
On the currency front, however, the Pakistani rupee showed resilience. The rupee registered a marginal gain against the US dollar in the inter-bank market on Tuesday, settling at 281.86, up by Re0.01. This marks the thirteenth consecutive session of rupee appreciation against the greenback, providing some stability amid broader financial market fluctuations.
Analysts suggest that while the rupee’s steady performance offers some relief, equity market investors will continue to face uncertainty in the near term. The interplay between global events, domestic economic indicators, and investor sentiment will remain the key drivers of market direction in the coming weeks.
As rollover week continues, market watchers expect further choppiness at the PSX, with profit-taking likely to persist until stronger triggers emerge to restore investor confidence. For now, cautious trading strategies appear to dominate the market landscape.