Stocks fall on Pakistan-Afghanistan standoff

The Pakistan Stock Exchange (PSX) came under selling pressure on Wednesday as investors reacted to renewed tensions between Pakistan and Afghanistan, coupled with mixed corporate earnings. The KSE-100 index fell 1,635.97 points, or 1.02%, to close at 158,465.06.

The index fluctuated between a high of 160,690 and a low of 158,307. Investor sentiment remained weak after peace talks between Islamabad and Kabul failed to yield progress. Analysts believe the market’s correction phase is likely to continue in the near term as traders remain cautious amid uncertain political and economic conditions.

KTrade Securities noted that the PSX continued to face selling pressure as the absence of positive catalysts further dampened investor confidence. The KSE-100 fell 1,636 points to 158,465. He attributed the decline to several factors, including the collapse of negotiations between Pakistan and Afghanistan, which hurt sentiment, as well as margin calls and institutional selling that added to market volatility.

Notable selling was seen in stocks like Lucky Cement, United Bank, Mari Energies, MCB Bank, Engro Fertilizers and Bank AL Habib. In contrast, National Bank provided some support after announcing strong quarterly results.

Looking ahead, investor sentiment is expected to remain cautious during the renewal week as investors adjust their futures positions. In addition, corporate earnings season will continue to play a key role in shaping the market’s short-term direction, KTrade added.

Arif Habib Limited (AHL) commented that the index’s October lows of around 158,000 “are now under threat and likely to be tested in the coming sessions.” Around 19 stocks advanced while 78 declined, with National Bank (+2.31%), Thal Limited (+5.99%) and Bank Alfalah (+0.85%) contributing the most to the index’s gains. Lucky Cement (-2.29%), UBL (-1.26%) and Mari Energies (-2.04%) were the biggest decliners in the index.

AHL said NBP reported 9MCY25 earnings per share (EPS) of Rs 30.88, up 16 times year-on-year. Pakistan Petroleum reported 1QFY26 EPS of Rs7.38, down 15% YoY, along with a dividend of Rs2 per share, while Oil and Gas Development Company (OGDCL) reported 1QFY26 EPS of Rs8.91, down 7% YoY, accompanied by a dividend of Rs3.5 per share. AHL added that a recovery may emerge after six consecutive sessions of decline that dragged the KSE-100 down 6%.

Topline Securities observed that Wednesday’s trend mirrored the previous session, with the KSE-100 initially opening on a positive note, gaining 589 points. However, selling pressure soon intensified, sending the index down 1,635 points.

The market continued its correction phase as investors reacted to mixed corporate results, where some companies posted strong earnings while others missed expectations. Margin requirements on leveraged positions further accelerated the decline, while volatility remained high due to the ongoing week of futures conversion, it said. Total trading volume fell to 951.8 million shares compared with Tuesday’s tally of 1.02 billion shares. Transaction value stood at Rs 41.3 billion.

Shares of 478 companies were traded, of which 123 closed higher, 314 decreased and 41 remained unchanged.

K-Electric led the volume chart with 93 million shares, rising Rs 0.17 to close at Rs 5.44. It was followed by Hascol Petroleum with 54 million shares, gaining Rs 0.25 to close at Rs 15.54 and WorldCall Telecom with 51 million shares, rising Rs 0.01 to close at Rs1.80. Foreign investors were net buyers of shares worth Rs 657.7 million, according to NCCPL.