KARACHI: The Pakistan Stock Exchange (PSX) extended its losses for the third consecutive session on Wednesday, as investors remained cautious amid fresh flood warnings and economic concerns, coupled with rollover pressure ahead of the expiry of futures contracts.

The benchmark KSE-100 index shed 941 points, closing below the 147,500 level. An early rebound was short-lived as selling pressure dominated the session, with risk aversion prevailing among investors.

According to Topline Securities Ltd, the market remained under pressure due to futures rollover activity and heightened flood alerts issued by the National Disaster Management Authority (NDMA). The NDMA warned of “very high to exceptionally high” flood risks in Lahore and several areas of Punjab due to heavy rainfall and India’s release of water, prompting calls for military assistance in six districts.

On the performance board, positive contributions from Meezan Bank, Engro Holdings, and MCB Bank added 137 points to the index. However, these gains were outweighed by losses in Habib Bank, Fatima Fertiliser, Service Industries, National Bank, and Mari Petroleum, which collectively dragged the index down by 331 points.

Market participation improved, with traded volume rising 28.7 per cent to 856.7 million shares. However, the total traded value declined 7.1pc to Rs29.28bn, indicating investor focus on low-priced stocks. Pace Pakistan led the volume chart with 87.8m shares traded.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said the market struggled for direction due to rollover week pressures and NDMA’s alarming flood forecasts. He noted that while liquidity remains intact, sentiment has shifted to risk-off as investors brace for potential damage to crops, disruptions in supply chains, and knock-on effects on inflation and monetary policy.

With Pakistan’s fragile external balance still under IMF oversight and import flows sensitive to any logistical disruption, analysts expect continued volatility in the near term. The 146,500–148,000 point zone is considered a key support area, although macroeconomic and climate-related risks are likely to limit any strong recovery.

Ahsan Mehanti of Arif Habib Corporation said stocks closed lower amid pressure after the State Bank of Pakistan projected GDP growth of just 3.2pc for FY26. Institutional profit-taking in leveraged positions, futures rollover activity, anticipated inflationary pressure, a proposed hike in industrial gas tariffs, and ongoing political uncertainty all contributed to the bearish close.

Published in Dawn, August 28th, 2025