The Pakistan Stock Exchange experienced a significant downturn on Friday as widespread selling pressure gripped the market, causing the KSE-100 Index to plunge by over 4,000 points during early trading hours. This sharp decline marked a stark reversal from the previous day’s strong rally, signaling a return of investor wariness amid growing concerns over both domestic and international economic conditions.
By 11:20 AM, the benchmark index was trading at 158,459.94 points, reflecting a substantial drop of 2,750.73 points from its previous close. The downward momentum continued, and before noon, the index hit its lowest level of the day at 157,072.64 points. This broad-based sell-off extended across key sectors, including oil and gas exploration, power generation, refineries, automobile assembly, cement production, commercial banking, and fertiliser companies. Major market heavyweights such as HUBCO, MARI, POL, PPL, MCB, MEBL, NBP, and UBL all recorded notable declines, contributing to the overall negative sentiment.
It is important to note that Thursday had witnessed a remarkable recovery for the PSX, with the KSE-100 surging by 5,433 points, or 3.49 percent, closing at 161,210.68 points. This rally was among the strongest single-day gains seen in recent months, driven by optimism among investors. However, the optimism was short-lived as global market pressures and geopolitical uncertainties quickly dampened sentiment on Friday.
The downward trend at the PSX mirrored a broader sell-off in international markets. Asian equities faced significant losses, heading toward their steepest weekly declines in six years. Oil prices surged dramatically, climbing over 15 percent during the week, largely fueled by escalating tensions in the Middle East. The MSCI Asia-Pacific index, excluding Japan, dropped 0.4 percent on Friday and was on track for a weekly decline of 6.6 percent, marking its largest weekly fall since March 2020.
Meanwhile, Japan’s Nikkei index fell by 0.5 percent, poised for a 6.5 percent weekly loss, and South Korea’s Kospi index slid sharply, heading toward its biggest weekly drop in six years with a 10.5 percent decline. These movements underscored the pervasive risk aversion gripping investors across the region. Energy markets emerged as the primary catalyst behind this volatility, with Brent crude oil prices hovering around $83 per barrel—up from nearly $69 just a week earlier. Similarly, US crude oil prices reached a 20-month high earlier in the week, with both benchmarks set to record their largest weekly gains since February 2022.
Investors appeared to be seeking liquidity amid fears of prolonged geopolitical instability and the possibility of further tightening by central banks in response to rising energy costs. This cautious stance was reflected in the bond markets, where U.S. Treasury yields climbed approximately 18 basis points over the week, marking the biggest weekly increase in nearly a year. Concurrently, the U.S. dollar strengthened, on course for its most robust weekly gain in around 16 months.
In addition to these external factors, profit-taking also played a role in the sell-off. Technology-heavy markets retreated as investors moved to offset losses incurred elsewhere, further intensifying the downward pressure on the PSX. The combination of global market volatility, geopolitical concerns, and domestic profit-taking created a challenging environment for Pakistani equities, resulting in the steep slide witnessed on Friday.
