PSX bleeds amid political uncertainty, geopolitical shocks

KARACHI (Our Correspondent): The Pakistan Stock Exchange (PSX) faced a double blow on Monday, as the imposition of Governor’s Rule and Emergency in Khyber Pakhtunkhwa and a fresh oil shock following Houthi attacks on Saudi Arabia triggered panic selling.

The KSE-100 index closed at 165,124.87 points after losing 1,965 points, or 1.18%. The index traded between an intraday high of 166,988 points and a low of 165,168 points, ending near the day’s low.

Volumes remained under pressure due to low investor participation. About 363 million shares worth Rs14.51 billion were traded. Out of 571 traded companies, 322 closed lower, 135 higher, while 114 remained unchanged.

PSX Director Ahmed Chinoy told The Karachi Post that two factors hit the market at the same time.

“Along with the political turmoil in Khyber Pakhtunkhwa, there is also an oil shock. The Houthi attack on Saudi Arabia has changed the entire sentiment,” Chinoy said.

He noted that the geopolitical tensions in Hormuz still prevail, whereas, the closure of Riyadh Airport and cancellation of some of the flights to Jeddah have also catalyzed uncertainty among investors.

Chinoy projected that the market will remain volatile for the next few sessions until there is clarity on the political situation in KP and stability in crude prices.

It is pertinent to mention that the US President Donald Trump’s statement about a possible energy ceasefire between Russia and Ukraine had given some hope, but that hope was wiped out after Houthis attacked Saudi installations.

Oil is Pakistan’s biggest import bill. When Brent remains above $100, it means pressure on the rupee, current account and inflation. For PSX, that is a direct negative.