Equities on the Pakistan Stock Exchange (PSX) exhibited a volatile and mixed performance on Thursday, caught between the downward pressure of a sharp spike in global oil prices and the supportive sentiment from progress in talks with the International Monetary Fund (IMF).
Index Swings Amid Conflicting Forces
The benchmark KSE-100 index experienced significant intraday volatility, trading between a high of 157,080.28 points—a gain of 0.78%—and a low of 153,503.70 points, representing a steep decline of 1.51%. The index closed the previous session at 155,858.47.
“The market showed mixed reactions during the session as rising international oil prices weighed on sentiment, while optimism surrounding Pakistan’s progress in negotiations with the IMF provided some support to investor confidence,” said a director at Mayari Securities.
Global Oil Shock Reverberates
The primary headwind stemmed from a dramatic surge in global oil markets, with Brent crude leaping above $100 per barrel. Prices soared over 9% following reports of attacks on ships in Gulf waters and the closure of key oil terminals, stoking fears of prolonged supply disruptions and higher inflation.
This triggered a regional sell-off, with MSCI’s Asia-Pacific index outside Japan falling 1.6%. An announcement by the International Energy Agency to release 400 million barrels from strategic reserves, including a major US contribution, failed to calm the markets.
IMF Progress Acts as a Buffer
Limiting the downside was reported progress in Pakistan’s discussions with the IMF for a staff-level agreement under the $7 billion Extended Fund Facility. According to reports, consensus is nearing on a revised macroeconomic framework.
Key revisions under discussion include a downward adjustment of the Federal Board of Revenue’s tax collection target to approximately Rs13.45 trillion for the fiscal year ending June 2026. The inflation outlook for the current fiscal year is projected around 7%–7.5%.
Remittance Data and Early Support
Positive economic data provided early session support. The United Arab Emirates overtook Saudi Arabia as the largest source of remittances in February, with overseas Pakistanis sending $696 million. Overall remittances for February stood at $3.29 billion, marking a 5.2% year-on-year increase.
“Stocks showed positive activity in the early session at PSX amid institutional support on higher remittances, easing fuel supply fears on timely reserve buildup and SBP status quo in the policy announcement last week,” noted the CEO of Arif Habib Commodities.
Analysts suggest investor focus will remain split between geopolitical developments affecting oil prices and the concrete outcome of the IMF negotiations, which are crucial for Pakistan’s economic stability.
