Stocks closed lower at the Pakistan Stock Exchange (PSX) on Friday after a highly volatile session triggered by a sharp increase in fuel prices, though a strong intraday recovery highlighted underlying market resilience.

The benchmark KSE-100 index settled at 150,398 points, down 1,612 points or 1.06% day-on-day. The market opened with a steep gap-down of nearly 3,000 points, reflecting panic selling after the government raised petrol and diesel prices in line with IMF commitments. However, buying interest later in the session helped trim losses significantly, according to KTrade.

Trading activity remained robust, with total volumes clocking in at 270 million shares. Key contributors to turnover included Cnergy, K-Electric (KEL), and Bank of Punjab (BOP), indicating active participation despite heightened uncertainty.

Investor sentiment remained under pressure following the government’s decision to withdraw fuel subsidies, a move widely seen as inflationary. Analysts noted that while the development sparked an initial sell-off, much of the anticipated impact — including the likelihood of higher interest rates — appeared to be already priced in.

Sector-wise, oil and gas as well as refinery stocks provided crucial support, helping the index rebound from its intraday lows. Major positive contributions came from Meezan Bank (MEBL), Engro Fertilizers (EFERT), Pakistan Oilfields (POL), Bank AL Habib (BAHL), Bank Alfalah (BAFL), and Pakistan State Oil (PSO).

On the downside, heavyweight stocks including United Bank (UBL), Engro Holdings (ENGROH), Fauji Fertilizer Company (FFC), Systems Limited (SYS), Lucky Cement (LUCK), and Mari Petroleum (MARI) exerted pressure, keeping the index in negative territory.

Broadly, sectors such as commercial banks, cement, fertilizers, technology, and investment banks closed in the red, while refineries emerged as the top-performing segment.

Market participants remain cautious amid ongoing geopolitical tensions, particularly developments surrounding US-Iran relations, which have pushed global oil prices higher. With Brent crude hovering near $110 per barrel, investors are closely watching for any signs of escalation or a potential ceasefire.

Analysts expect market direction in the coming sessions to remain sensitive to external developments. In the current environment, investors are advised to adopt a cautious approach, focusing on fundamentally strong, dividend-yielding stocks while limiting exposure to high-beta plays.