KARACHI: The Pakistan Stock Exchange (PSX) faltered on Friday as escalating tensions along the western border dampened investor sentiment, reversing the overnight recovery.

The benchmark KSE-100 index fell 831 points, or 0.49 per cent, to close at 168,062 after a volatile, range-bound session.

According to Topline Securities Ltd, the negative momentum stemmed largely from border tensions, though late-session buying helped the index pare earlier losses.

The market opened in the red following reports of Pakistani security forces carrying out airstrikes on militant strongholds inside Afghanistan. The heightened geopolitical situation triggered broad-based selling, dragging the index to an intraday low of 165,811.88, a loss of 3,081 points or 1.82pc before recovering part of the losses later in the session as no immediate retaliatory action was reported from the Afghan side.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said the session remained volatile amid concerns about regional instability, with investors trimming positions.

United Bank Ltd, Fauji Fertiliser Company, Oil and Gas Development Company, Pakistan Petroleum Ltd and MCB Bank were among the major drags, collectively shaving 658 points off the index. Other laggards included Mari Energies, Systems Ltd, Habib Bank Ltd, Attock Refinery Ltd and National Bank of Pakistan.

Overall market participation remained subdued. The trading volume fell 22.53pc to 536 million shares while the traded value dipped 28.66pc to Rs25.5 billion. Unity Foods led the volume chart with 50.3m shares changing hands.

In terms of traded value, National Bank of Pakistan topped the list at Rs1.36bn, followed by MCB Bank (Rs1.12bn), Pakistan Petroleum Ltd (Rs1bn), Bank of Punjab (Rs969m) and Bank Alfalah (Rs905m).

Analysts said near-term market direction would hinge on developments along the western border, with any escalation likely to keep investors cautious, while signs of de-escalation could support a recovery in equities.

Published in Dawn, February 28th, 2026