The Pakistan Stock Exchange (PSX) came under pressure on Monday as escalating geopolitical tensions and elevated oil prices weighed on investor sentiment.
The KSE-100 Index declined 2,541 points, or 1.49% day-on-day, to close at 167,971.
Geopolitical Tensions Pressure Investor Sentiment
Investor confidence remained cautious amid the escalating US-Iran conflict and attacks on shipping through the Strait of Hormuz.
With international oil prices staying above USD 100 per barrel, investors are increasingly concerned about the potential impact on Pakistan’s fuel prices and inflation outlook.
Higher energy costs could also put pressure on the country’s import bill and create additional challenges for monetary policy, adding to uncertainty across the market.
Investors Await SBP Monetary Policy Decision
Market participants were also focused on the State Bank of Pakistan’s Monetary Policy Committee (MPC) decision scheduled for later in the evening.
According to Ali Najib, Deputy Head of Trading at Arif Habib Ltd., most of the market was expecting a “status quo” decision, with the benchmark interest rate likely to remain at 11.50% for the next couple of months.
The monetary policy decision remained an important near-term catalyst for market direction, particularly as investors assess the balance between inflationary risks and economic activity.
PPL Reports Stronger FY26 Earnings
On the corporate front, Pakistan Petroleum Limited (PPL) reported FY26 earnings per share of PKR 36.21, up 7% year-on-year from PKR 33.82 in FY25.
The company also announced a final dividend of PKR 6 per share, taking its total FY26 dividend per share to PKR 12.
The results provided a stock-specific development amid broader market weakness.
Major Stocks Drag KSE-100 Lower
On the index contribution front, UBL, FFC, LUCK, OGDC, MCB, ENGROH, HBL, BAHL, FATIMA and SYS emerged as the major laggards.
Together, these stocks erased 1,331 points from the benchmark index, accounting for a significant portion of the day’s decline.
The broad-based weakness reflected a cautious approach among investors as geopolitical risks and macroeconomic uncertainty dominated trading sentiment.
Trading Activity Remains Stable
Despite the sharp decline in the benchmark, market activity remained relatively stable.
A total of 564 million shares changed hands during the session, while overall turnover stood at PKR 24.4 billion.
CNERGY topped the volume chart with 96.9 million shares traded, highlighting continued activity in selected high-volume stocks despite the broader market decline.
Volatility Expected to Continue
Going forward, market activity is likely to remain volatile, with selective profit-taking and stock-specific movements expected to shape trading during the ongoing result season.
Geopolitical developments, elevated international oil prices and monetary policy decisions will remain key drivers of market direction.
Investors are likely to closely monitor developments in the Middle East alongside corporate earnings and domestic economic indicators as they assess the outlook for the KSE-100.