The Pakistan Stock Exchange (PSX) closed sharply lower on Tuesday as investor sentiment turned bearish following a brief early-session rally. The benchmark KSE-100 index plunged by 1,415.24 points, or 1.02%, to close at 137,964.82, driven by profit-taking, political uncertainty, and caution ahead of the State Bank of Pakistan’s (SBP) key monetary policy announcement.
Early Optimism Fades Fast
Trading kicked off on a positive note, with the KSE-100 index climbing as much as 951 points to an intraday high of 140,331. This initial optimism was largely fueled by reports of a near-finalized trade and tariff agreement between Pakistan and the United States, which initially sparked hopes of improved bilateral trade flows.
However, the bullish momentum could not sustain. Investors quickly shifted gears, booking profits in heavyweight sectors and repositioning portfolios in anticipation of the SBP’s monetary policy meeting. The possibility of a 50-basis-point policy rate cut has stirred speculation across sectors.
Expert Take: Political and Economic Uncertainty Weighs
According to Ahsan Mehanti, Director at Arif Habib Corp, Tuesday’s bearish trend was a result of several overlapping concerns:
“Stocks closed bearish amid uncertainty ahead of the SBP policy decision. Political noise, fears about rupee fluctuations, and futures rollover pressures all contributed to the market’s decline.”
His remarks echoed the mood on the trading floor, where traders appeared to be holding back amid short-term uncertainty.
Engro Fertilisers Adds Fuel to the Fire
One of the most prominent triggers for Tuesday’s negative sentiment was the delayed earnings announcement by Engro Fertilisers, a key constituent of the KSE-100. Investors, expecting lower-than-usual earnings and dividend payout, were left in limbo after the company deferred its financial results announcement to Wednesday morning. This uncertainty led to increased sell-off in the stock and related sectors.
Topline Securities reported:
“Bulls started strong but heavy selling pressure emerged midway. The index slid to an intraday low of 1,743 points, highlighting a decisive bearish dominance.”
Sector-Wise Breakdown: Gainers vs Losers
On the KSE-100 index:
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23 shares closed higher
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76 shares ended in the red
Major gainers included:
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Fauji Fertiliser Company (FFC): +0.75%
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Ghani Glass Ltd: +9.44%
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Meezan Bank: +0.83%
Key losers dragging down the index:
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Engro Holdings: -3.17%
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Engro Fertilisers: -5.12%
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United Bank Limited (UBL): -1.80%
Despite the overall negative sentiment, FFC managed to beat expectations by announcing first-half earnings per share (EPS) of Rs27.02, reflecting a 5% YoY increase, along with a Rs19/share dividend.
Strategic Developments
In a positive development, Pakistan National Shipping Corporation (PNSC) saw a 1.43% gain after receiving Letters of Intent from both the Port Qasim Authority and Karachi Port Trust. These are aimed at jointly exploring opportunities to expand Pakistan’s commercial shipping fleet and marine logistics capacity.
(Read more about PNSC’s initiatives on their official website)
Market Analyst Insights
Muhammad Hasan Ather, Analyst at JS Global, observed that Tuesday’s volatility was not surprising:
“The drop reflects profit-taking ahead of the SBP policy announcement. With inflation on a downward trajectory and the rupee relatively stable, all eyes are on whether the central bank adopts a dovish tone.”
The monetary policy committee is widely expected to reduce rates, considering falling inflation. Any clear dovish signals could trigger renewed buying interest, offering a rebound opportunity for local equities.
Trading Volume and Foreign Activity
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Trading volume surged to 606.3 million shares, up from 589.3 million a day earlier.
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Traded value dropped slightly to Rs32.7 billion from Rs34.6 billion.
Among the volume leaders:
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Telecard Limited: 38.7 million shares traded, closing at Rs7.84 (+0.24)
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Bank of Punjab: 31.9 million shares traded, closing at Rs13.47 (-0.02)
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WorldCall Telecom: 28.5 million shares traded, closing at Rs1.44 (-0.02)
According to the National Clearing Company of Pakistan Limited (NCCPL), foreign investors were net buyers, purchasing equities worth Rs14.3 million.
(Visit NCCPL for updated foreign inflow data.)
What to Watch Next
With the SBP’s monetary policy announcement scheduled for Wednesday, market direction will hinge on the outcome. A rate cut could uplift investor mood, particularly in leveraged and growth-oriented sectors.
However, should the central bank maintain the status quo or deliver a smaller-than-expected cut, further volatility may follow. Investors are advised to maintain cautious optimism and keep an eye on earnings releases and macroeconomic indicators.
Conclusion
The 1,415-point drop on Tuesday highlights the fragile investor sentiment at the PSX amid uncertainty. While early optimism on US-Pakistan trade developments gave the index a brief lift, profit-taking and sectoral shifts wiped out gains by the end of trading.
Upcoming monetary policy decisions and key earnings announcements will be pivotal in determining market sentiment for the remainder of the week. As always, staying informed and diversified remains the key strategy for navigating such turbulent sessions.
Read more: IMF Prediction For Pakistan to Grow 3.6% as Government Faces Fiscal
