KARACHI: Despite persistent volatility stemming from a destabilised Middle East and border tensions with Afghanistan, the Pakistan Stock Exch­ange (PSX) on Tuesday managed to stage a partial recovery as attractive valuations across the board following an unprecedented overnight bloodbath attracted fresh buying, helping the benchmark KSE-100 index regain the lost ground partially amid fluctuations.

Topline Securities Ltd noted that after an overnight heavy sell-off, the bulls staged a confident comeback. Early weakness dragged the index to an intraday low of 714 points, but just when sentiment seemed fragile, buyers quietly returned to the arena. As investors reassessed the situation and grew confident that geopolitical tensions are unlikely to prolong, the mood shifted from fear to opportunity.

Value hunters stepped in, accumulating fundamentally strong stocks at attractive levels. The renewed momentum lifted the index to an intraday high of 6,244 points before it closed at 157,132, up 5,159 points or 3.28pc.

Index-heavy names, including Fauji Fertiliser, United Bank, Engro Holdings, Meezan Bank, and Mari Energies, led the charge, collectively contributing approximately 2,753 points to the index gain.

Surging oil prices amid geopolitical tensions continue to pose economic challenges

Amid a recovery drive, market participation weakened, with volume falling 4.79pc to 770 million shares and traded value dipping 8.55pc to Rs44.3bn. K-Electric dominated the volume leaders’ board, with over 74 million shares traded.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd (AHL), said the market staged a partial recovery following the previous session’s historic decline.

On Monday, the index posted its largest-ever single-day decline, shedding 16,089 points or 9.57pc to close at 151,973 points.

The market opened on a strong footing, gaining more than 4,000 points shortly after trading began. However, residual selling pressure and redemption-driven activity from the prior session weighed on momentum, causing the index to surrender early gains. At one point, the KSE-100 slipped into negative territory, touching an intraday low of 151,259 points, down 714 points.

In the latter half of the session, renewed buying interest emerged, particularly in blue-chip stocks, as value hunters capitalised on attractive valuations. Broad-based accumulation helped the index rebound sharply, providing much-needed relief to investors.

Geopolitical developments will determine whether the rebound proves to be merely a temporary “dead-cat” bounce or the beginning of a sustainable reversal from the recent bearish trend. Continued escalation could prolong volatility and exert further pressure on investor sentiment. Conversely, any meaningful signs of stability or de-escalation may help restore confidence, reduce risk premiums, and pave the way for a gradual recovery in the equity market.

The closure of the Strait of Hormuz, which accounts for 20 per cent of the world’s oil supply, and shutdowns of oil and gas facilities across the Middle East amid ongoing attacks, fuelled oil prices to their highest peaks for the second straight session on Tuesday, as there seems to be no imminent end to the conflict.

The government decided to continue passing on the impact of rising global oil prices to consumers under the existing fortnightly adjustment mechanism to avoid a fiscal burden. A meeting of the newly created 18-member cabinet committee on Monday, constituted by the prime minister to monitor petroleum prices in view of the emerging regional situation, was informed that petrol and diesel stocks in the country were sufficient for almost 30 days. However, Qatar Gas had shut its LNG facility after it came under attack.

Analysts warned that prolonged shipping disruptions and higher energy import costs could strain Pakistan’s foreign exchange reserves, adding another layer of risk to an already fragile economic outlook.

Published in Dawn, March 4th, 2026