KARACHI: Renewed concerns about Pakistan`s economic outlook and rising geopolitical tensions caused a wave of panic selling by cautious investors, forcing the benchmark KSE 100 index to fall below the 118,000 barrier on Wednesday.

Ahsan Mehanti of Arif Habib Corporation said the PSX closed sharply lower after the IMF slashed the GDP growth forecast to 2.6pc for FY25 amid the Trump tariff blow.

He added that Fitch Ratings forecast on the weakening rupee, political noise, and investor fears over the outfall of Indianoccupied Kashmir security unrest played a catalyst role in the bearish close at PSX.

Topline Securities Ltd observed that the bears made a forceful comeback, snapping the four-daywinning streak. The index witnessed heightened volatility, losing 1,309 points intraday before settling at 117,226 marking a sharp decline of 1,204 points or 1.02 percent day-on-day.

The brokerage house attributed the reversal in sentiment to escalating regional geopolitical tensions, which prompted investors to adopt acautious stance and lock in recent gains.

The downward trajectory of the index was significantly influenced by negative contributions from key stocks, includingUnited Bank Ltd, Hub Power, Habib Metropolitan Bank, Mari Energies, and Engro Holdings, which collectively dragged the index down by 526 points.

Ali Najib, Head of Salesat Insight Securities, said a negative PSX performance, contrary to the widespread expectations of a bullish spell after Mr Trump`s soft statement that China tariffs will drop `substantially but it won`t be zero`, left investors surprised.

The day commenced on an optimistic note as the index hit an intraday high at 118,811, but the downward growth revision by the IMF from 3pc to 2.6pc for FY25 dampened investor sentiments.

In addition, Fitch`s forecast, highlighting concern that the rupee may slide to Rs285 against the US dollar by June and likely fall further to Rs295 by the next fiscal year`s end, also kept bulls at bay asinvestorsoptedtohave a cautious approach.

Market participation slowed as trading volume tumbled 18.31pc to 605.17 million shares, while the traded value fell 9.05pc to Rs27.76 billion day-on-day.