PSX falls as oil prices, shipping constraints weigh on sentiment

• KSE-100 Index settled at 157,496.1, down 3,714.57 points, or 2.3%.
• Index reached session high of 161,435.83, up 225.16 points, or 0.14%.
• Index recorded a low of 157,072.64, down 4,138.03 points, or 2.57%.

The bourse fell on Friday as rising global oil prices and tighter shipping conditions in the post-war environment weighed on sentiment, while investors stayed cautious ahead of the State Bank’s next monetary policy decision.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index settled at 157,496.1 points, down 3,714.57 points, or 2.3%, from the previous close of 161,210.67.

The index traded between a high of 161,435.83 (up 225.16 points, or 0.14%) and a low of 157,072.64 (down 4,138.03 points, or 2.57%).

"The market remained under pressure amid rising global oil prices and tightening shipping constraints in the post-war environment, which dampened investor sentiment," said Huzaifa Riaz, Director, Mayari Securities (Pvt) Limited.

"Investors also adopted a wait-and-see approach ahead of the upcoming monetary policy announcement, keeping activity cautious," he added.

A Topline Market Review said investors turned sceptical after Thursday’s strong rally and opted to reduce exposure ahead of the weekend as fears grew that the US-Iran conflict could turn into a prolonged war. Topline said the KSE-100 declined 2.3% to close at 157,496.

Topline added that the biggest negative contribution to the index came from UBL, ENGROH, FFC, LUCK, HUBC, MEBL, SYS, OGDC and BAFL, which cumulatively contributed -2,124 points. 

By traded value, PPL (Rs1.83 billion), OGDC (Rs1.66 billion), ATRL (Rs1.62 billion), UBL (Rs1.16 billion) and NBP (Rs980 million) led activity, while total traded volume and value stood at 360 million shares and Rs23 billion, respectively.

Adding to the caution, Pakistan’s central bank is expected to hold its policy rate steady at 10.5% at a review on Monday, a Reuters poll showed, as higher energy prices and regional tensions cloud the inflation outlook and limit the room for cuts. 

All 10 analysts surveyed expected no change after policymakers also held rates in January; the central bank has cut the key rate by a cumulative 11.5 percentage points since mid-2024 from a record 22%.

Analysts warned that the energy shock could keep inflation sticky. AKD Securities analyst Muhammad Aliv said energy prices would dictate the rate path and inflation could average around 7% during the second half of FY26. 

JS Capital head of research Waqas Ghani said higher oil prices widen the trade deficit and pressure the rupee, adding that every $10 per barrel increase in crude typically adds about 0.5 percentage points to inflation; he said inflation clocked in at 7% in February, up from 5.8% in January.

In the previous session on Thursday, the KSE-100 surged 5,433.46 points (3.49%) to close at 161,210.68 from 155,777.21, after moving between 161,476.85 and 156,250.29.