KARACHI: After staging a massive recovery rally in the last two sessions driven by selective buying, the Pakistan Stock Exchange on Friday faced renewed selling pressure.

The surge in oil prices amid growing uncertainty in the Middle East reignited fears of supply disruptions, which could increase inflationary pressures, especially in countries heavily dependent on energy imports through the Strait of Hormuz, including Pakistan.

Topline Securities Ltd said the index remained under pressure, closing at 175,802.79 points, down 2,320.78 points, or 1.3 per cent. The negative sentiment was largely driven by escalating geopolitical tensions, as reports indicated that the US and Iran had intensified attacks beyond military targets, raising concerns about a broader conflict and the absence of any agreement regarding the strait.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said the PSX saw mixed trading, opening higher on selective buying before profit-taking emerged in the latter half as investors booked gains ahead of the weekend. Elevated geopolitical tensions also weighed on sentiment following fresh exchanges of strikes between the US and Iran, prompting a cautious stance among market participants.

Oil surge, profit-taking snap two-session recovery rally

On the macro front, Pakistan recorded a current account deficit (CAD) of $649 million in June, while FY26 ended with a marginal CAD of $139 million. Meanwhile, technology exports reached a record $4.6bn, up 21pc year-on-year, accounting for 46pc of total services exports. Additionally, the Real Effective Exchange Rate rose to 106.44 in June, its highest level since September 2018, while net FDI inflows stood at $14m. For FY26, net FDI declined 34pc year-on-year to $1.64bn.

Engro Holdings, Systems Ltd, United Bank, Oil and Gas Development Comp­any, Pakistan Petroleum, Hub Power, Meezan Bank, Habib Bank, and Lucky Cement came under profit-taking pressure, collectively shaving 1,105 points off the benchmark.

Market activity remained relatively subdued, with traded volume falling 15.73pc to 621 million shares and traded value dipping 13.65pc to Rs29.8 billion. Cnergyico PK led the volume chart with 86.4 million shares.

Analysts believe market sentiment will remain cautious as investors closely monitor geopolitical developments. Nonetheless, the current corporate earnings season and appealing valuations might continue to bolster certain stocks.

Published in Dawn, July 18th, 2026