KARACHI: The Pakistan Stock Exchange (PSX) experienced subdued market conditions on Tuesday as the overnight increase in interest rates, after a gap of over three years, made equity investors cautious, amid economic pressures and calls from the industrial and manufacturing sectors for action on surging production costs driven by expensive energy prices stemming from geopolitical tensions.

The lack of an immediate resolution to the US-Iran conflict continued to weigh on the global economy, especially in Pakistan, which relies on oil and LNG supplies from the Middle East. As a result, the benchmark KSE 100 index remained under selling pressure, falling below pre-war levels.

Topline Securities Ltd reported a lacklustre session on the PSX, affected by the SBP’s hawkish move, which raised the policy rate by 100bps to 11.5pc. This unexpected tightening dampened investor confidence, leading to cautious trading and widespread profit-taking across major sectors.

The benchmark index remained under pressure throughout the session, sliding to an intraday low of 1,326 points before closing at 168,412, down 1,085 points or 0.64pc, as higher rates dampened risk appetite and curtailed near-term equity appeal.

Index falls 1,085 points as rate hike hits sentiments

Key index heavyweights, including Fauji Fertiliser, United Bank, Lucky Cement, National Bank, and Sazgar Engineering Works, remained under sustained selling pressure, collectively eroding 733 points from the index.

Market activity remained relatively subdued, with investor participation driven by panic selling. Trading volume surged by 52.56pc to 1,190 million shares, while traded value increased modestly by 3.35pc to Rs34.5 billion. Cnergyico PK Ltd led the volume chart, trading 265 million shares.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said that after the policy rate hike, the market remained volatile, oscillating in both directions, but ultimately closed the day lower.

On the macro front, the Karachi Interbank Offered Rate jumps up to 99 bps after SBP hikes interest rates to 11.5pc from 10.5pc.

On the corporate front, Nishat Power Ltd declined by 5.17pc and Nishat Chunian Power Ltd by 6.67pc, reporting 9MFY26 results with earnings per share of Rs4.69 and Rs4.3, respectively, along with a dividend per share of Rs1.5 each, largely aligning with expectations. Nonetheless, heightened market anticipation of significantly stronger earnings led to selling pressure after the results were released.

Published in Dawn, April 29th, 2026