Hot money bolts PSX with $4.4m exit

March 02, 2026 (MLN): Selling pressure intensified across trading floors as investors rushed to cut exposure, offloading shares amid escalating war fears and mounting uncertainty.

While the benchmark KSE-100 Index plunged 16,089 points (-9.57%), underlying capital flows revealed a sharp divergence in investor behaviour: foreign funds exited aggressively, while domestic participants stepped in to absorb the supply.

Foreign Portfolio Investors (FIPI) recorded net selling of $4.43 million, exiting key sectors such as cement, banking, and technology.

In a mirror image, Local Investors Portfolio Investment (LIPI) posted net buying of $4.43mn, acting as buyers of last resort as prices spiraled downward.

The exodus was led by foreign corporates, which alone accounted for a $5.24mn outflow, signalling a rapid risk-off shift typically seen during geopolitical crises.

Overseas Pakistanis provided modest support with net inflows of $0.81mn, but this was insufficient to offset institutional withdrawals.

On the domestic side, local mutual funds dumped a staggering $47.18mn, likely driven by redemption pressures, margin calls, and portfolio de-risking.

However, strong buying from Banks / DFIs ($22.53mn), Individuals ($11.34mn), Companies ($10.01mn), and Insurance firms ($3.65mn) helped stabilize the market from an even steeper collapse.

Foreign selling concentrated in cement and banks, traditionally viewed as proxies for domestic economic activity.

Meanwhile, selective inflows into fertilizer, OMCs, and textiles indicate cautious positioning rather than broad conviction buying.

Local investors showed interest in power and technology stocks, possibly due to their defensive characteristics and lower sensitivity to immediate geopolitical shocks.

 FIPI & LIPI Sector-wise Flow (USD mn)

Unless geopolitical tensions ease and visibility improves, foreign investors are likely to remain cautious. 

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