Stocks came under renewed selling pressure at the Pakistan Stock Exchange (PSX) on Friday as investor sentiment remained fragile following the government’s decision to withdraw fuel subsidies and sharply increase petroleum prices.

The benchmark KSE-100 index experienced a volatile session, losing over 1,600 points. It initially plunged deeply before recouping some of the losses, but ultimately closed in the red as inflationary concerns and macroeconomic uncertainty kept investors cautious.

At the close of trading, the benchmark KSE-100 index posted a sharp decline of 1,612.55 points, or 1.06%, and settled at 150,398.71.

Arif Habib Limited (AHL) noted that Pakistan’s stock market remained under pressure during the current week, with the KSE-100 index declining by 0.9% week-on-week to close just above the key psychological support level of 150,000.

Despite the overall negative trend, select heavyweights provided some support, as 21 shares contributed a cumulative 79 index points, led by Meezan Bank (+5.97%), Engro Fertilisers (+5.88%) and Pakistan Oilfields (+1.93%). On the flip side, major laggards including UBL (-4.44%), Engro Holdings (-2.94%) and Fauji Fertiliser (-0.85%) weighed heavily on the index.

Macroeconomic developments also influenced investor sentiment as the government raised prices of petrol to Rs458 per litre and diesel to Rs520 per litre, moving to a targeted subsidy approach. Analysts estimate that earlier the government provided a subsidy of around Rs129 billion ($462 million).

Global cues remained mixed, with geopolitical tensions between the US and Iran raising fears of further escalation, while the extended Easter holiday in Western markets suggests a potentially news-heavy period ahead.

Market participants expect volatility to persist, with the possibility that oil prices may be nearing a short-term peak. Looking ahead, analysts believe that the 150,000 level will remain a crucial support zone for the index at the start of the coming week.

On the activity front, the average daily traded volume stood at around 471 million shares while traded value averaged Rs24.6 billion. Among individual stocks, Cnergyico, Attock Refinery, Sui Southern Gas Company, Power Cement and Pakistan Oilfields emerged as top gainers, while Honda Atlas Cars, Systems Ltd, Air Link Communications, Kohat Cement and UBL were among the major losers during the week.

“Another negative session was observed at the exchange after government’s announcement to end fuel subsidy (whereby diesel prices were increased by 55% and petrol prices by 43%),” Topline Securities noted in its market review.

The top negative contribution to the index came from UBL, ENGROH, FFC, SYS and LUCK as they cumulatively erased 1,100 points. Traded value-wise, Attock Refinery (Rs2.7 billion), UBL (Rs2.2 billion), Pakistan Petroleum (Rs1.4 billion), OGDC (Rs1.23 billion) and PSO (Rs811 million) dominated the activity, Topline said.

KTrade highlighted that the federal government’s decision to withdraw fuel subsidies in line with the IMF’s requirements, resulting in a significant increase in petrol and diesel prices, weighed on sentiment, given its clear inflationary implications. However, much of this impact appears already priced in, with expectations of higher interest rates largely embedded in market positioning.

Overall trading volumes were recorded at 471.9 million shares compared with the previous session’s tally of 352.3 million. The value of shares traded during the day was Rs24.6 billion.

Shares of 483 companies were traded. Of these, 132 stocks closed higher, 279 fell and 72 remained unchanged.

Cnergyico PK was the volume leader with trading in 97.2 million shares, gaining Rs0.59 to close at Rs7.45. It was followed by WorldCall Telecom with 28.3 million shares, closing unchanged at Rs1.18 and Pak Refinery with 24.2 million shares, gaining Rs2.99 to close at Rs32.90. Foreign investors sold shares worth Rs288 million, the National Clearing Company reported.