Pakistan stocks dip amid regional geopolitical tensions following attack in occupied Kashmir

KARACHI: After four consecutive sessions of bullish momentum, the bears made a strong comeback at the Pakistan Stock Exchange (PSX) on Wednesday.

The benchmark index witnessed heightened volatility, plunging by as much as 1,309 points intraday before settling at 117,226 — marking a sharp decline of 1,204 points or 1.02 per cent.

“The reversal in sentiment can largely be attributed to escalating regional geopolitical tensions, which prompted investors to adopt a cautious stance and lock in recent gains,” said Topline Securities Research.

The downward trajectory was significantly influenced by negative contributions from key stocks including UBL, HUBC, HMB, and ENGROH, which collectively dragged the index down by 526 points.

“Stocks closed sharply lower after the IMF slashed its GDP growth forecast to 2.6 per cent for FY26, amid concerns over Trump-era tariffs,” said Ahsan Mehanti, CEO at Arif Habib Commodities.

“Fitch Ratings’ outlook of a weakening rupee, political uncertainty, and concerns over the fallout from the recent unrest in Indian-occupied Kashmir all played a catalytic role in the bearish close at the PSX,” he added.

Despite the decline, investor participation remained robust, with total traded volume reaching 604 million shares and market turnover amounting to Rs27.7 billion. The Bank of Punjab (BOP) led the volume chart, with 58 million shares changing hands.

Al Habib Capital noted that market sentiment was dampened not only by the IMF’s revised GDP forecast but also by Fitch’s projection of the rupee depreciating to Rs295 by mid-2026.

Moreover, expectations that the central bank may maintain the status quo in the upcoming Monetary Policy Committee meeting also contributed to subdued investor sentiment.

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In the previous session, the PSX had closed nearly flat with modest gains of 46 points (0.04 per cent), ending at the 118,430.35 level amid ongoing earnings announcements.