Moaaz Manzoor

Selling pressure deepens at the Pakistan Stock Exchange (PSX), as renewed fears over the global tariff wars and recession risks continue to rattle investor sentiment, validating earlier warnings of a bearish trend despite temporary market recoveries, reports WealthPK.

This ongoing wave of market anxiety comes a day after a brief recovery, which has now been largely dismissed as a temporary uptick in an otherwise downward trend. The KSE-100 index closed at 114,153 points on Wednesday, reflecting a decline of 1,379 points or 1.19%, reinforcing the prevailing bearish sentiment.

During the session, notable blue-chip stocks like UBL, ENGROH, OGDC, PPL, and SYS came under heavy selling pressure, collectively dragging the index down by 639 points. Meanwhile, counters such as MARI, ILP, THALL, and SAZEW displayed some resilience, contributing 77 points in support.

Speaking with WealthPK, Ali Najib, Head of Sales at Insight Securities, reaffirmed his earlier view: "In yesterday’s market review, I anticipated a mild recovery as a potential dead cat bounce — a temporary uptick in a downward trend. Today’s market action validated that view, with further declines reinforcing the underlying bearish momentum.”

Najib added that the imposition of a 104% tariff by the United States on Chinese imports has intensified the ongoing “Tariff War” between the two major economies. “This development further dampened the investor sentiment at the PSX in anticipation of heightened recession risks due to a slowdown in global growth,” he explained.

He further noted a sustained decline in the global commodity prices as a “blessing in disguise,” which could likely offset the expected drawdowns in exports and remittances resulting from the new tariff dynamics. “Because of this expectation, Pakistan’s equities are showing some resilience relative to peers amid the ongoing global equity sell-off,” he observed.

The broader uncertainty triggered by global trade tensions has made investors cautious, leading to a slowdown in trading activity. On the day, the trading volume stood at 446.6 million shares, with a total turnover of Rs26.5 billion. K-Electric (KEL) led the charts with over 54.5 million shares exchanged, reflecting investor preference for high-volume, low-priced stocks during volatile phases.

Syed Zafar Abbas, Manager at Zahid Latif Khan Securities, shared a similar sentiment: "Heightened recession risks due to a slowdown in global growth are dampening investor sentiment at the PSX.” However, he also pointed out that the lower commodity prices — especially oil — and a potential competitive advantage from the shifting tariff landscape could positively impact our external account.

In light of the ongoing tariff-driven uncertainty, analysts suggest that investors will likely remain selective, focusing on sectors that may benefit from the global price adjustments or trade realignments. The extended sell-off at the PSX underlines a fragile market sentiment driven by external tariff shocks and looming fears of a global recession.

While falling commodity prices may provide short-term cushions, sustained volatility will likely persist unless broader trade tensions ease or domestic economic fundamentals strengthen meaningfully.

Credit: INP-WealthPk