The Pakistan stock market remained under pressure on Tuesday. Investors stayed cautious amid global uncertainty. Fresh US tariffs and rising geopolitical tensions triggered another bearish session at the Pakistan Stock Exchange.
The benchmark KSE-100 Index at the Pakistan Stock Exchange (PSX) closed at 166,258.54 points. The index lost 1,432.54 points. This marked a decline of 0.85 percent from the previous close of 167,691.08 points.
During the session, the KSE-100 Index moved sharply. It touched a high of 169,237.51 points, gaining 1,546.43 points at one stage. However, heavy selling pressure dragged it down to a low of 163,907.59 points. That reflected a steep intraday loss of 3,783.49 points.
Despite the volatility, late-session buying helped trim losses. Value hunters entered the market after Monday’s massive sell-off. As a result, the index recovered some ground before closing.
US Tariffs and Bond Yields Trigger Market Sell-Off
Analysts linked the downturn to multiple risk factors. According to Ahsan Mehanti, CEO of Arif Habib Commodities, rising government bond yields played a key role in the sell-off. Higher yields in last week’s SBP auction signaled tightening financial conditions.
Moreover, concerns over monetary policy added to investor anxiety. The State Bank of Pakistan (SBP) has maintained a cautious stance amid rising inflation. Weak corporate earnings projections further dampened sentiment.
At the same time, global developments intensified pressure. US President Donald Trump reintroduced trade tariffs after a Supreme Court ruling struck down earlier broad duties. The new tariffs, initially set at 10 percent, target imported goods. Trump has also signaled a possible increase to 15 percent.
Sector-specific duties on steel and automobiles remain intact. These tariffs will stay in place for 150 days unless Congress extends them. Consequently, global markets reacted with caution.
In addition, geopolitical risks increased investor nervousness. President Trump stated he would decide within 10 to 15 days whether to order strikes on Iran if nuclear talks fail. Reports suggest military options include direct action against Iranian leadership.
The United States and Iran have held indirect talks in Oman and Switzerland. However, both sides have yet to reach common ground. Talks are scheduled to resume soon. Therefore, investors are closely watching the outcome.
Economic Data Adds to Market Volatility
Domestic economic indicators also influenced market direction. Pakistan posted a current account surplus of $121 million in January. Strong remittances and lower imports supported the monthly surplus.
However, the broader picture remains mixed. The cumulative current account showed a $1.07 billion deficit in the first seven months of FY26. In comparison, the country recorded a $564 million surplus during the same period last year. This shift reflects import normalization as economic activity improves.
Meanwhile, inflation data raised fresh concerns. The Pakistan Bureau of Statistics (PBS) reported a 1.16 percent weekly increase in the Sensitive Price Indicator (SPI) for the week ended February 19. Year-on-year SPI inflation stood at 5.19 percent.
On Monday, the KSE-100 Index had already plunged 5,478.63 points, or 3.16 percent. The sharp drop set a negative tone for Tuesday’s session. Although selective buying emerged, uncertainty continues to dominate investor sentiment.
Going forward, analysts believe market direction will depend on US-Iran talks, IMF review progress, and domestic monetary policy signals. Until clarity emerges, volatility at the PSX is likely to persist.
