KARACHI: Despite inflows from the International Monetary Fund (IMF), the Pakistan Stock Exchange (PSX) recorded losses for the fourth consecutive session on Wednesday amid persistent volatility triggering selling from nervous investors, pushing the benchmark KSE-100 index below the pre-war level.

While noting that the near-term outlook remained broadly stable, the State Bank of Pakistan, in its half-yearly report for 2025-26, has warned that slower activity in Gulf economies could affect remittance inflows, which have been instrumental in financing the trade deficit and supporting stability in the foreign exchange market.

It also cautioned that supply chain disruptions could affect industrial production and exports, while fertiliser shortages may impact crop yields. It warned that lingering impacts of war-related disruptions could pose significant challenges to macroeconomic stability over the medium term.

Topline Securities Ltd said the benchmark index remained under pressure throughout a volatile, range-bound trading session, as cautious investor sentiment prevailed amid a lack of tangible progress in ongoing negotiations and lingering uncertainty over developments between the US and Iran. Persistently elevated oil prices further dampened market confidence. During the session, the index fluctuated, touching an intraday low of 1,587 points.

Investor nervousness grows after SBP flags risks to economic stability

Although the market staged a modest recovery toward the close, the benchmark index ultimately settled at 167,451.14 points, down 1,465.08 points, or 0.87 per cent.

Index-heavy stocks, including United Bank, Habib Bank, Bank Al-Habib, Lucky Cement, and Hub Power, remained under selling pressure, collectively dragging the index lower by 734 points.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said PSX witnessed another mixed session. The market initially opened on a strong note after the State Bank of Pakistan confirmed the receipt of a $1.2 billion IMF tranche, providing some relief to investor sentiment. However, lingering political uncertainty kept confidence fragile, prompting profit-taking activity that eventually dragged the market into negative territory.

In addition, MSCI has added Habib Metropolitan Bank Ltd to its frontier index, while removing pharma firm The Searle Company Ltd.

Investor participation weakened sharply as total trading volume plunged 32.68pc to 684 million shares, and traded value declined 32.12pc to Rs21.6bn. Agha Steel Industry led the volumes chart, with over 58.6 million shares traded during the session.

Published in Dawn, May 14th, 2026