Pakistan Stock Exchange (PSX) witnessed persistent selling pressure on Wednesday, as the benchmark KSE-100 Index closed sharply lower amid heightened geopolitical uncertainty and cautious investor sentiment.

In the morning, the market opened under significant pressure, setting a jittery tone for the session. Intra-day volatility remained elevated, with the Index briefly recovering 119.24 points (+0.07%) around 11:34 am after an early decline of 135.08 points (-0.08%), reflecting the absence of a clear directional trend.

Throughout the session, investor sentiment remained fragile as uncertainty surrounding anticipated US-Iran peace talks in Islamabad kept participants on edge. This led to a dominant “wait-and-see” approach, resulting in subdued trading volumes and a lack of buying interest.

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Market activity was largely shaped by a tug-of-war between supportive and negative triggers. A $1 billion Saudi deposit provided some psychological support and helped cushion deeper losses. However, this was outweighed by aggressive profit-taking across key sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration companies, oil marketing companies (OMCs), power generation, and refineries.

The benchmark KSE-100 Index recorded a high of 173,155.79 and a low of 171,579.31 during the session. Ultimately, the Index declined by 1,576.48 points, or 0.91%, and settled at 171,579.31, reflecting broad-based weakness across the market.

“Investors are closely monitoring progress on the potential US–Iran agreement, as Tehran continues to evaluate the proposed terms and is demanding the reopening of the Strait of Hormuz before formally responding on the resumption of negotiations,” AKD Securities Director Research Mohammed Awais Ashraf told The Express Tribune.

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An indefinite extension of the ceasefire should be interpreted as a constructive development by investors; however, the continued closure of the Strait of Hormuz remains a key concern, Ashraf observed.

KTrade Securities equity trader Ahmed Sheraz observed that the KSE-100 Index closed at 171,579 points, declining by 1,576 points (-0.91% DoD), as selling pressure persisted in a cautious and largely mixed session. Early attempts at stabilisation faded, with sentiment remaining fragile amid external uncertainties. Activity was concentrated in Cnergyico PK, Yousaf Weaving, and Bank of Punjab.

On the downside, key index-heavy stocks including UBL, Lucky Cement, Pakistan Petroleum, Habib Bank, and Oil and Gas Development Company weighed on performance.

From a macro perspective, the backdrop remains tense. While the ceasefire extension offers a degree of short-term relief, the continued closure of the Strait of Hormuz and lack of progress on US-Iran negotiations are keeping risk appetite subdued. Neither side has confirmed diplomatic engagement in Pakistan, reinforcing a near-term deadlock and uncertainty in regional stability. Meanwhile, oil prices remain elevated, with Brent hovering around $98–99 per barrel, adding pressure to inflation expectations and external account concerns.

Until clarity emerges on geopolitical developments, particularly regarding negotiations, the market is likely to remain under pressure with a cautious bias, Sheraz believed.