On Tuesday, the Pakistan Stock Exchange (PSX) experienced a decline of over 500 points, reversing earlier gains, as investor sentiment was dampened by escalating tensions with neighboring India. The benchmark KSE-100 Index initially surged by approximately 900 points following the State Bank of Pakistan’s unexpected decision to reduce the key policy rate by 100 basis points to 11%, aiming to stimulate economic growth amidst challenges such as U.S. trade tariffs and regional geopolitical strains.
Despite the initial optimism, profit-taking ensued across major sectors, leading the index to an intraday low of 683 points and closing at 113,568, marking a 0.47% decrease. Analysts noted that while the rate cut provided a temporary boost, concerns over the ongoing standoff with India overshadowed market confidence.
Energy sector stocks, including Pakistan State Oil and Oil & Gas Development Company Ltd., saw gains exceeding 2% amid expectations of banks releasing payments to address the Rs1.2 trillion circular debt in the energy sector. However, the broader market remained cautious due to geopolitical uncertainties.
