Volatility returns to PSX as global trade concerns weigh down sentiment

The capital market slid into negative territory on Friday, weighed down by renewed selling pressure and lingering concerns over global uncertainty, trade policies, and domestic fiscal challenges.

The Pakistan Stock Exchange's benchmark KSE-100 index shed 1,335.88 points, or 1.15%, to settle at 114,853.33. During the day, the index swung between a high of 115,937.38 and a low of 114,639.92 as investors treaded on eggshells amid persistent economic concerns. 

As many as 250.7 million shares changed hands, while the trading value clocked in at Rs23.54 billion. The index had closed the previous session at 116,189.21.

“The Pakistan equity market has exhibited significant volatility in recent trading sessions, characterised by sharp fluctuations, including today's decline. This turbulence is largely attributed to anxieties surrounding global trade dynamics,” said Amreen Soorani, Head of Research at Al Meezan Investment.

“While the 90-day pause on US tariffs offers a temporary reprieve, market participants remain vigilant. The trajectory of the IMF program, developments around the federal budget and the volatile international commodity prices are poised to be critical determinants of market sentiments,” she added.

Ahsan Mehanti, analyst at Arif Habib Corp, highlighted key bear drivers behind Friday’s early losses. “Stocks are under pressure on bearish global equities and a slump in global crude oil prices amid fears over the outcome of the US-China trade war. Rupee instability and a 9% year-on-year decline in cement sales for March 2025 played a catalyst role.”

A report released by Islamabad-based think tank Tabadlab has projected that Pakistan could face an estimated export loss of $564 million in FY2025-26 due to steep new tariffs imposed by the United States. The Trump administration had earlier announced a 29% tariff on Pakistani exports, though a 90-day pause has since been announced.

Amid this uncertainty, a high-level Pakistani delegation is preparing to travel to Washington to renegotiate trade terms. The government had confirmed the delegation’s visit before Trump announced the temporary suspension of the tariff measures.

Domestically, the Federal Board of Revenue (FBR) is preparing for critical discussions with the International Monetary Fund (IMF), with a technical mission set to arrive in Islamabad on April 14. The two sides are expected to explore proposals for broadening the tax base, including bringing untaxed sectors and higher pension brackets into the tax net, while the government eyes relief for the salaried class.

On Thursday, the KSE-100 Index had rebounded strongly, rising 2,036.05 points or 1.78% to close at 116,189.21, boosted by a global rally triggered by Trump’s pause on tariffs. The day’s high reached 117,484.17, while the low stood at 116,130.9.

Analysts warn that volatility is likely to persist in the coming sessions, with investors closely watching IMF talks, budgetary proposals, and any new developments on global trade.