KARACHI:

Pakistan Stock Exchange (PSX) on Monday lost significant ground as it shed over 1,500 points, thanks to the global market decline following US President Donald Trump’s tariff announcements for Mexico, Canada and China, potentially initiating a trade war.

The KSE-100 index opened the day under pressure and it quickly descended. Although there was a slight recovery, where the index reached its intra-day high of 114,621 points, the market was unable to sustain the momentum.

Domestic concerns, including political uncertainty and the upcoming International Monetary Fund (IMF) review, added to the bearish sentiment. Despite a low inflation of 2.4% for January, investors were wary of the State Bank’s monetary policy stance in the coming months.

Key sectors like fertiliser, exploration and production (E&P) and technology saw significant selling.

Ahsan Mehanti of Arif Habib Corp commented that stocks closed lower amid selling pressure in global equities over Trump’s tariff levies on close trading partners.

Worries over a cautious SBP policy easing despite inflation standing at only 2.4% in January contributed to the bearish sentiment, he said, adding that rupee instability, political noise and uncertainty about the outcome of IMF review later in February amid a shortfall in tax collection played the role of catalysts in bearish activity at the PSX. At the close of trading, the benchmark KSE-100 index recorded a decline of 1,510.72 points, or 1.32%, and settled at 112,745.01.

In its review, Topline Securities stated that the KSE-100 index mirrored the trend in global markets, reacting negatively to the news that US President Donald Trump had ordered sweeping tariffs on goods from Mexico, Canada and China. “This announcement created a ripple effect in international markets and the local market followed suit.” The index opened the day under pressure and quickly descended. Despite a slight recovery, the market could not sustain the positive momentum, closing at 112,745, down 1,511 points, it said.

On the domestic front, Pakistan’s Consumer Price Index (CPI) for January was recorded at 2.41%, the lowest in 111 months, compared to 4.1% in December 2024, providing a brief positive respite amid a broader market decline, it added.

Arif Habib Limited (AHL) reported that the week started with further choppy trading within the 112,000-115,500 range. Some 25 shares rose while 68 fell with UBL (+0.93%), Lucky Cement (+1.58%) and Meezan Bank (+1.23%) contributing the most to index gains. On the other hand, Mari Petroleum (-3.93%), Fauji Fertiliser Company (-1.83%) and Systems Limited (-3.01%) were the biggest drags, it said.

AHL noted that January CPI rose 2.41% year-on-year, which was below expectations and down from 4.1% in the previous month. “Moving forward, inflation is expected to pick up over the coming months.” It added that the average true range for KSE-100, a measure of volatility, had dropped from over 3,500 points to 1,500 points, indicating that a break in the 112-115.5k range was around the corner.

Ali Najib of Insight Securities remarked that during early trading, the benchmark index saw buoyant sentiment and touched the intra-day high at 114,621 (+365 points). However, taking influence from regional markets which were mostly receiving selling headwinds, the PSX too walked into the red zone, where it stayed till close.

Overall trading volumes decreased to 401.5 million shares compared with Friday’s tally of 543.1 million. Shares of 450 companies were traded. Of these, 137 stocks closed higher, 262 fell and 51 remained unchanged.

WorldCall Telecom was the volume leader with trading in 26.3 million shares, falling Rs0.01 to close at Rs1.63. It was followed by The Bank of Punjab with 24.7 million shares, gaining Rs0.12 to close at Rs10.23 and Ghani Chemical with 22 million shares, falling Rs0.15 to close at Rs20.03. During the day, foreign investors sold shares worth Rs436.2 million, the NCCPL reported.