KARACHI: The sentiment on the Pakistan Stock Exchange (PSX) remained bearish as panicky investors continued to reduce their holdings amid ongoing border tensions with India, causing the benchmark KSE index to lose over 1,000 points intraday ahead of the monetary policy announcement.

Ahsan Mehanti of Arif Habib Corporation said the PSX turned flat after the government took titfor-tat security measures to ban the use of its ports by Indian flag carriers, SBP monetary policy uncertainty and a slump in global crude oil prices.

He noted that the rupee instability and fears over the outcome of heightened tensions between nucleararmed neighbours turned equity investors cautious,leading to a negative closing.

Topline Securities Ltd observed that the benchmark index was volatile,falling by 1,036 points in early trading. However, it made a strong recovery in the second half, mainly supported by the cementsector, as investors expected a possible rate cut in the monetary policy later in the day.

The index settled at114,102 points, down just 12 points, or 0.01pc.

This recovery was mostly helped by key stocks like Fauji FertiliserCompany, DG Khan Cement, Fauji Cement Company, Pioneer Cement, and Maple Leaf Cement, adding about 276 pointstotheindex.

Ali Najib, Sales Head at Insight Securities Ltd, said the market witnessed a sideways movement ahead of unveiling a crucial Monetary Policy Statement by the State Bank of Pakistan. The street had scattered expectations ofa status quo to 50-100bps cut in the policy rate.

`The trading resumed on a negative note in the backdrop of a negative surprise on the macro front where the trade deficit of $3.4bn for April shocked most of the equity investors,` he noted.

The market participation was strong as the trading volume rose 7.22pc to 399.53 million shares.

However, the traded value fell 14.74pc to Rs19.85 billion day-on-day.