The Pakistan Stock Exchange (PSX) witnessed a sharp sell-off on Friday, with the benchmark KSE-100 Index shedding 2.3% as rising global oil prices and tightening shipping constraints in a tense regional environment spooked investors.
Market Performance and Key Drivers
The KSE-100 Index settled at 157,496.1 points, down 3,714.57 points from the previous close. The index oscillated between an intraday high of 161,435.83 and a low of 157,072.64. Analysts attributed the decline to a confluence of external and domestic pressures.
“The market remained under pressure amid rising global oil prices and tightening shipping constraints in the post-war environment, which dampened investor sentiment,” said an analyst from Mayari Securities. “Investors also adopted a wait-and-see approach ahead of the upcoming monetary policy announcement, keeping activity cautious.”
Sectoral Impact and Trading Activity
The downturn was broad-based, with major index-heavyweights leading the losses. According to a market review, the biggest negative contributions came from stocks including UBL, ENGRO, FFC, LUCK, and HUBC. In terms of activity, Pakistan Petroleum (PPL), Oil and Gas Development Company (OGDC), and Attock Refinery (ATRL) led the traded value. Total market volume stood at 360 million shares, with a value of Rs23 billion.
Central Bank Policy in Focus
Adding to the market’s caution is the State Bank of Pakistan’s (SBP) upcoming monetary policy decision on Monday. A Reuters poll of analysts expects the central bank to hold its key policy rate steady at 10.5%, as higher energy prices and regional tensions cloud the inflation outlook.
Analysts warn that the recent energy price shock threatens to keep inflation elevated. “Energy prices would dictate the rate path,” noted an analyst from AKD Securities. Separately, an analyst from JS Capital highlighted the macroeconomic strain, stating that every $10 per barrel increase in crude oil typically adds about 0.5 percentage points to inflation, which rose to 7% in February from 5.8% in January.
Context and Previous Session
Friday’s decline followed a strong rally in the previous session, where the KSE-100 had surged 3.49%. Market participants noted that investors turned skeptical after that rally and opted to reduce exposure ahead of the weekend, with growing fears that ongoing regional conflicts could prolong economic disruptions.
The market’s sensitivity to oil prices and geopolitical developments underscores the fragile sentiment as Pakistan navigates a challenging economic landscape.
