Volatile PSX moves both ways after wobbly start as political frets weigh

Stocks got off to a wobbly start on Tuesday as political unrest intensified; however, after some early setbacks, the resilient capital market clawed back most of the losses, resuming its fundamentals-driven rally in cautious mode.

The Pakistan Stock Exchange’s (PSX) benchmark index fluctuated within a range, recording a high of 99,819.59 and a low of 97,361.93, reflecting the cautious stance of market participants. At the opening, the index failed to sustain its earlier gains, retreating below Monday’s close of 98,079.78 points.

The ongoing political unrest, fuelled by Pakistan Tehreek-e-Insaf’s (PTI) "do-or-die" protest, continues to cast a shadow over the capital market.

Explaining the decline, Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, said: “Stocks remained bearish due to political uncertainty and concerns over foreign outflows."

He added that PTI protests in the capital, consolidation amid the PSX futures contracts' rollover, and weak global crude oil prices led to the bearish spell.

Thousands of PTI supporters, defying barricades and government restrictions, have marched on Islamabad, demanding the release of political prisoners, the reversal of the 26th Constitutional Amendment, and the restoration of their alleged "stolen mandate."

The protests have sparked heightened volatility, with investors adopting a wait-and-see approach.

On Monday, the market experienced a rollercoaster session, recording an intraday high of 99,317.47 points before retreating to close at 98,079.78 points, gaining 281.55 points, or 0.29%.

While strong macroeconomic fundamentals and positive corporate earnings provided some relief, political jitters limited the gains.

Banking, fertiliser, and pharmaceutical stocks led the charge, reflecting investor interest in resilient sectors amidst turmoil.

Despite Monday’s modest rally, the persistent political instability has tempered market enthusiasm, as investors remain cautious of further disruptions to economic stability.

While strong macroeconomic indicators, such as declining yields and improved current account balances, provide a cushion, the ongoing protests pose a significant risk to investor confidence.

This is a developing story and is being updated with more details.