The Pakistan Stock Exchange (PSX) faced significant downward pressure on Thursday, erasing recent gains as the benchmark KSE-100 Index plunged by over 700 points during intra-day trading. After showing marginal positive momentum in early trade, the index reversed course amid heightened selling activity, ultimately hovering at 122,046.46 points by 3:30 PM, down 715.18 points or 0.58%.
This sharp decline follows a relatively optimistic session on Wednesday, when investor confidence had shown signs of recovery. The benchmark index had gained 515 points, or 0.42%, to close at 122,761.64 points. That upward trend was largely attributed to improving regional geopolitical stability, particularly a de-escalation of tensions in the Middle East that reassured market participants of reduced risk in the global oil supply chain.
However, that momentum failed to carry into Thursday’s session as renewed uncertainty in global financial markets, coupled with cautious sentiment at home, weighed heavily on investor activity. The selling trend came as international market movements presented a mixed picture, with Asian equities appearing tentative after recent gains.
The broader MSCI index of Asia-Pacific shares outside Japan remained largely flat in early Thursday trading. Although Tokyo’s Nikkei managed a 0.9% gain to reach a four-month high, overall market enthusiasm remained subdued.
Global investors appeared to be recalibrating their expectations in the wake of rising geopolitical and fiscal uncertainties, particularly from the United States. Oil prices stabilized following the ceasefire between Israel and Iran, which had previously sparked fears of potential disruptions in energy markets. Still, investor sentiment remained fragile amid growing speculation around U.S. monetary policy.
The U.S. dollar faced renewed pressure after media reports suggested that former President Donald Trump may be considering a public move to replace Federal Reserve Chair Jerome Powell by September or October. The news added a fresh layer of unease, further undermining confidence in the Federal Reserve’s independence and casting doubt over future interest rate directions.
Currency markets responded swiftly, with the euro hitting a three-and-a-half-year high at $1.6805. The Swiss franc also firmed to a decade peak, while the Japanese yen appreciated by 0.35% to 144.70 per dollar, reflecting investor appetite for safer assets.
Back home, PSX’s Thursday performance reflected both the spillover from international developments and localized concerns about the sustainability of recent market gains. Traders remain watchful of macroeconomic signals, policy clarity, and the evolving global financial environment, all of which are influencing portfolio strategies.
With uncertainty continuing to loom over fiscal and monetary policy directions globally, especially in key economic powerhouses, volatility is expected to remain a defining feature of stock market activity. Analysts anticipate that short-term recovery at PSX will depend heavily on renewed investor confidence and clearer macroeconomic guidance, both from domestic policy institutions and global central banks.