Trading at the Pakistan Stock Exchange (PSX) remained highly volatile on Tuesday, as investors reacted to fresh macroeconomic data and shifting intra-day sentiment.

According to the Pakistan Bureau of Statistics (PBS), the country’s trade deficit widened by 3.82% year-on-year (YoY) in April 2026 to over $4.0 billion, which weighed on investor confidence early in the session.

Soon after the opening bell, the benchmark KSE-100 Index plunged sharply, losing over 1,300 points by 9:30am. The early sell-off reflected cautious investor behaviour amid concerns over external account pressures.

The market, however, staged a gradual recovery as the session progressed. While trading remained choppy with the Index swinging between gains and losses, buying interest emerged in the latter half of the day, helping the market rebound strongly.

Read: PSX holds gains in choppy trade

The Index moved between an intra-day high of 164,920.35 and a low of 162,532.99. Eventually, the market recovered from early-session losses as the KSE-100 index posted healthy gains of 793.53 points or 0.48% and settled at 164,742.47.

“Investors are closely tracking progress in US–Iran peace negotiations, as any positive breakthrough would trigger a strong market rally that is trading at attractive multiples,” AKD Securities Director Research Mohammed Awais Ashraf told The Express Tribune.

On a sequential basis, the trade deficit increased by $1.2 billion primarily because of a significant surge in the import bill due to higher oil prices. Besides, a surge in trade deficit is expected due to an increase in oil prices post US-Iran war, he added. 
KTrade Securities equity trader Ahmed Sheraz noted that the KSE-100 closed at 164,742, up 793 points (+0.48% DoD), but the headline gain flatters what was otherwise a slow, directionless session.

The Index spent most of the day drifting in a tight band, flipping between green and red. Volumes in KSE100 remained subdued at 210 million shares, reflecting weak conviction on both sides of the tape.

Read more: PSX slides 4.5% as geopolitics rattle investors

Support came primarily from commercial banks and selective exploration & production names, with heavyweights such as Fauji Fertiliser, Pakistan Petroleum, MCB Bank, Oil and Gas Development Company, Bank Al Falah, and Meezan Bank lending points to the Index. Though overall participation lacked the kind of aggression needed to build momentum, the market, for now, feels like it’s idling in neutral rather than preparing for a breakout.

The broader backdrop remains cautious. Regional cues stayed mixed to negative, keeping risk appetite in check, while Brent hovering near $113/bbl continues to cast a long shadow over Pakistan’s external position. With April’s trade deficit crossing $4billionn, pressure on the macro front is quietly building, and any further spike in oil could tighten the screws.

Ongoing geopolitical developments, particularly around US-Iran dynamics, remain a key swing factor for sentiment.
Going forward, Sheraz expects this range-bound, news-driven behaviour to persist.