KARACHI: The Pakistan Stock Exchange (PSX) came under renewed pressure on Monday, with the KSE-100 Index hitting an intraday low of 169,071.03, down 4,098.68 points (-2.31%) from the previous close of 173,169.71. Investors remained cautious due to escalating US-Iran tensions, while the start of the roll-over period added to intraday volatility and weighed on market sentiment.
Market Performance and Volatility
The KSE-100 Index fluctuated between a high of 174,336.85 (up 1,167.14 points, 0.67%) and its intraday low, reflecting the uncertainty in the market. Huzaifa Riaz, Director at Mayari Securities, explained that investors were taking a cautious stance amid the geopolitical tensions between the US and Iran, which prompted risk-averse positioning. He added that the absence of near-term triggers and the commencement of the roll-over period contributed further to market volatility, keeping the bias lower.
Geopolitical Concerns
Tensions intensified after US President Donald Trump indicated that he would decide within “10 to 15 days” whether to order strikes on Iran if no nuclear agreement is reached. Reports suggest that military options presented to him include potential strikes targeting Iran’s supreme leader, Ayatollah Ali Khamenei. The US and Iran have held two rounds of indirect talks in Oman and Switzerland, with negotiations set to resume in Switzerland, although positions on key issues remain divergent.
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Economic Indicators
Despite the market slump, Pakistan’s macroeconomic fundamentals showed mixed signals. According to the State Bank of Pakistan (SBP), foreign investors’ profit and dividend repatriation rose to $1.677 billion in the first seven months of fiscal year 2026 (7MFY26), compared with $1.328 billion in the previous year. The current account posted a surplus of $121 million in January, supported by strong remittances and lower imports, although the cumulative deficit for 7MFY26 reached $1.07 billion, compared to a $564 million surplus last year.
The Sensitive Price Indicator (SPI) also indicated a weekly inflation increase of 1.16%, rising to 335.67 points for the week ending February 19, while year-on-year SPI inflation stood at 5.19%. The SPI showed increases across all consumption groups, including 1.11% for the lowest income bracket (up to Rs17,732).
Outlook
After gaining 999.42 points (0.58%) on Friday to close at 173,169.71, the PSX’s sharp fall on Monday underscores investor sensitivity to geopolitical developments and rollover-driven uncertainty. Analysts suggest that unless diplomatic tensions ease and market triggers emerge, volatility is likely to persist in the near term, keeping risk appetite subdued among domestic and foreign investors.
