The Pakistan Stock Exchange (PSX) experienced a highly volatile session on Tuesday, with the KSE-100 index swinging between losses and gains before closing 179 points lower at 114,177, marking a 0.16% decline.

According to Topline Securities, the market opened on a negative note as investors reacted sharply to the State Bank of Pakistan’s (SBP) decision to keep the policy rate unchanged at 12% despite easing inflation.

This dampened sentiment pushed the index to an intraday low of 746 points.

However, optimism returned in the latter half of the session amid speculation about the possible clearance of the longstanding circular debt.

This shift helped the index recover to an intraday high of 129 points.

Key contributors to the recovery included PSO, PPL, OGDC, MEBL, and HUBC, which collectively added 425 points.

On the other hand, UBL, SRVI, FFC, and EFERT dragged the index down by 210 points.

Overall, trading activity remained robust, with 318 million shares changing hands, generating a turnover of Rs22.8 billion. SSGC led the volume charts with 26 million shares traded.

Ahsan Mehanti of Arif Habib Corp noted that stocks closed lower amid thin trade as the SBP’s status quo on the policy rate, persistent core inflation, and external account pressures weighed on investor confidence.

“Late-session support emerged following upbeat data showing a 40% year-on-year surge in remittances to $3.1 billion in February 2025,” Mehanti said.

He added that a global equity selloff over US recession concerns, a weak rupee, and uncertainty surrounding Pakistan’s ongoing review talks with the IMF also contributed to the bearish close.

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The S&P 500 dropped 2.7% on Monday, marking its largest one-day decline this year, while the Nasdaq fell 4.0%, its steepest drop since September 2022. S&P and Nasdaq futures decreased by 1% during Asian trading.

In Asia, major indexes reflected the downturn, with Japan’s Nikkei and Taiwan stocks falling around 3%, reaching their lowest levels since September. MSCI’s broadest index of Asia-Pacific shares outside Japan declined by over 1%.