Geopolitical jitters send PSX into a sharp fall

• Index touches an intraday high of 116,658 and a low of 113,867.
• Analysts say it was a classic tug-of-war between bulls and bears.
• Decline attributed to profit-taking after the sharp early session rise.

The country's capital market tumbled on Monday as escalating tensions with India rattled investors, fuelling a wave of selling across sectors and dragging the benchmark index sharply lower.

The benchmark KSE-100 index fell by 1,405.44 points, or 1.22%, to settle at 114,063.90 after touching an intraday high of 116,658.94 and a low of 113,867.80 during the session. Total traded volume stood at 190.2 million shares, while the value of shares traded reached Rs20.5 billion.

At the previous close, the index had ended at 115,469.34.

Topline Securities in its post-market report said that the PSX witnessed a classic tug-of-war between bulls and bears on Monday.

"The index opened on a positive note, gaining strong momentum in the early hours to register an intraday high of 1,189 points," the brokerage said. 

"However, the optimism proved short-lived as intensified selling pressure later in the session caused the index to reverse sharply, touching an intraday low of 1,601 points."

The brokerage noted that the prevailing negative sentiment was largely driven by escalating tensions between India and Pakistan, which heightened investor concerns and weighed heavily on overall market confidence.

On the positive side, Systems Limited, Lucky Cement, Meezan Bank Limited, and Habib Bank Limited collectively contributed 489 points to the index. Conversely, Engro Corporation, United Bank Limited, Mari Petroleum Company Limited, Engro Fertilizers, and Pakistan State Oil Company shaved off 907 points from the benchmark.

"Despite the risk-averse sentiment, overall participation remained firm, with volumes clocking in at 421 million shares and a turnover of Rs26.43 billion," it added.

Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company, told Geo.tv that the market decline was due to profit-taking after the sharp rise earlier in the session.

The PSX had opened strongly, buoyed by positive developments over the weekend, including Pakistan’s successful diplomatic efforts at the United Nations Security Council regarding the Pahalgam attack.

This had initially boosted investor confidence, continuing momentum from last week when tensions between Pakistan and India led to significant market volatility.

Additionally, reports of progress in US-China trade negotiations helped ease fears of a prolonged trade war, lifting sentiment across global equity markets, including Pakistan's.

China, while denying ongoing tariff negotiations, exempted some US goods from retaliatory tariffs, signalling a slightly softer stance. It has also called for Washington to end threats and pressure tactics to create a conducive environment for dialogue.

"The improvement in international sentiment contributed to a positive atmosphere in local markets," Mustafa Mustansir, Director of Research and Business Development at Taurus Securities Limited, had told Geo.tv earlier.

Pakistan's positive image at the World Bank and IMF Spring Meetings supported bullish sentiment and robust corporate earnings reports. However, despite the initial surge, investors opted to cash in gains by the end of the session, leading to the market’s eventual decline.