Selling intensified at the Pakistan Stock Exchange on Monday, with the KSE-100 Index falling more than 2,300 points by early afternoon as political uncertainty and elevated global oil prices weighed on investor sentiment.
At 12:45pm, the benchmark stood at 165,843.38, down 2,312.11 points, or 1.37 percent. The decline extended the market’s weakness from the previous week and kept risk appetite subdued.
Political Uncertainty And Oil Prices Pressure Sentiment
Analysts attributed the market pressure to a combination of domestic political uncertainty and external economic concerns.
Saad Hanif, Head of Research at Ismail Iqbal Securities, said ongoing political uncertainty and elevated oil prices were weighing on sentiment and triggering selling across the market.
He noted that continued political noise was encouraging investors to adopt a cautious stance, while higher oil prices were raising concerns about inflation and overall macroeconomic stability.
Banks, Cement And Energy Stocks Lead Decline
The selling was broad-based, affecting several major sectors of the market.
Automobile assemblers, cement companies, commercial banks, oil and gas exploration firms, oil marketing companies, power generators and refineries all traded lower during the session.
Index-heavy stocks including PRL, NRL, HUBCO, MARI, OGDC, PPL, HBL, MEBL, NBP and UBL remained under pressure.
The weakness in these large-cap stocks added to the downward pressure on the benchmark, limiting the market’s ability to recover during the session.
Oil Prices And Monetary Policy Key Market Triggers
Sana Tawfik, Head of Research at Arif Habib Limited, said the market’s near-term direction would depend largely on developments in global oil prices and whether domestic political uncertainty begins to ease.
She identified the upcoming Monetary Policy Statement as another major market trigger, particularly whether the central bank keeps the policy rate unchanged or announces a revision.
For investors, the combination of oil prices, inflation expectations, political developments and monetary policy is likely to remain central to market sentiment.
KSE-100 Extends Previous Week’s Losses
Monday’s decline came after another difficult week for equities.
The KSE-100 Index fell 2,609.74 points, or 1.5 percent, during the previous week to close at 168,155.48.
Stalled US-Iran negotiations, a global sell-off in sovereign bonds and rising US Treasury yields had already increased risk aversion. The widening domestic trade deficit also added to concerns surrounding Pakistan’s external position.
US Treasury yields reached their highest levels since 2002, adding another layer of pressure to global financial markets.
Global Markets Offer Limited Relief
International markets began the week on a firmer note after cooler US jobs data reduced expectations of an aggressive Federal Reserve tightening cycle.
Markets were pricing in only a 22 percent probability of a US Federal Reserve rate increase this month, sharply lower than the 64 percent probability seen a week earlier.
However, the improvement in global sentiment has yet to translate into a sustained recovery at the Pakistan Stock Exchange.
Local investors remain focused on domestic political developments, oil prices and the direction of monetary policy.
KSE-100 Close Will Determine Market Direction
The figures available by 12:45pm represent an intraday snapshot rather than the final outcome for Monday’s trading session.
With the KSE-100 down more than 2,300 points, the closing level will determine whether selling pressure remained dominant through the end of the session or whether buyers managed to recover some of the losses.
For now, political uncertainty, elevated oil prices and expectations surrounding monetary policy remain key factors shaping investor sentiment at the PSX.