KARACHI: Due to a lack of positive triggers, the Pakistan Stock Exchange (PSX) on Friday was unable to sustain the overnight recovery rally as the economic impact of the ongoing Middle East crisis soured investors’ sentiments, leading them to panic sell and causing the benchmark KSE-100 index to fall below the 158,000-point mark.

Topline Securities Ltd said the index experienced a negative session as sceptical investors, after yesterday’s positive session in which the market increased by 3.5pc, came in to sell ahead of the weekend, as fears grow that the US-Iran conflict may turn into a prolonged war.

The closure of the Strait of Hormuz has forced the world’s largest shipping companies to suspend operations to and from the Gulf. This has certainly increased the cost of rerouting oil supplies from the region.

Given the development situation, the government is considering implementing weekly petroleum price adjustments starting March 8 to pass on extra costs, including higher insurance, freight, and war premiums, to consumers. It also plans to reinstate Covid-19-era measures nationwide, excluding health-specific restrictions, such as distance learning, remote work, and carpooling, to reduce foreign exchange and economic losses.

Index loses 3,715 points as overnight recovery rally loses steam

The largest negative impact on the index came from United Bank, Engro Holdings, Fauji Fertiliser, Lucky Cement, Hub Power, Meezan Bank, Systems Ltd, Oil and Gas Development Company Ltd, and Bank Alfalah Ltd, as they collectively erased 2,124 points.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd (AHL), stated that the PSX closed the week cautiously, with the index dropping by 3,715 points or 2.30 per cent to finish at 157,496.

During the shortened trading session, investor sentiment remained subdued, with market participants largely taking a cautious stance ahead of the weekend. The careful approach was mainly driven by concerns about a potential escalation in the ongoing US-Iran conflict, leading investors to reduce risk exposure amid heightened geopolitical uncertainty.

On the macroeconomic front, according to a survey conducted by AHL, the State Bank of Pakistan is widely expected to keep the policy rate at 10.5pc in the forthcoming monetary policy meeting. The anticipated status quo reflects the central bank’s cautious approach amid rising geopolitical tensions and the potential inflationary impact of higher global oil prices.

However, any unexpected increase in interest rates could further weigh on the already fragile market sentiment.

On the corporate front, Sazgar Engineering Works Ltd reported encouraging sales figures for February, with Haval (four-wheeler) sales reaching 1,682 units, representing a substantial 91pc year-on-year increase. Meanwhile, three-wheeler sales grew modestly by 2pc YoY to 2,704 units, indicating steady demand in the segment.

Market participation remained relatively subdued due to reduced trading hours, with total traded volume plummeting 49.83pc to 363 million shares, while the traded value declined 34.31pc to Rs23.10 billion. K-Electric emerged as the volume leader, with 35.2 million shares traded during the session.

Published in Dawn, March 7th, 2026