KSE-100 Index Plunges Over 3.5% Amid Geopolitical Tensions
The Pakistan Stock Exchange (PSX) witnessed a sharp decline on Thursday, with the benchmark KSE-100 Index plummeting to an intraday low of 150,022.43 points. This represents a staggering drop of 5,489.13 points, or 3.53%, from the previous close. The sell-off was triggered by heightened geopolitical risk after former US President Donald Trump issued a stark warning to Iran, sending shockwaves through global financial markets.
Trump’s “Stone Ages” Threat Fuels Oil Price Surge
In a prime-time address, Trump declared the US would strike Iran “extremely hard” over the next two to three weeks, threatening to hit the country into the “Stone Ages.” This rhetoric immediately dampened investor sentiment. “Yesterday’s Trump statement to continue fighting for 2 to 3 weeks and Iran’s comments on no ceasefire has increased oil prices today by 5 to 7%. That is dampening the mood,” said an independent investment analyst.
The comments sparked a surge in global oil prices, with Brent crude climbing over 4% to $105.55 per barrel and WTI rising 3% to $103.16. The spike exacerbates pressure on Pakistan’s economy, which is highly sensitive to energy import costs.
Risk Aversion Grips Global Markets
The fear of escalating conflict triggered a broad risk-off movement across world markets:
- US stock futures fell 0.67%.
- European futures traded 0.1% lower.
- MSCI’s Asia-Pacific index outside Japan dropped 0.75%.
- Japan’s Nikkei reversed gains to trade 0.79% lower.
Financial experts noted the severe impact on local sentiment. “The remarks signal potential escalation, keeping investors on edge and reinforcing a risk-off mood, with volatility likely to persist in the near term,” said the director of a local securities firm.
Domestic Economic Pressures Compound Sell-Off
The geopolitical shock compounded existing domestic concerns. Investor attention remains on economic indicators, including a recent rise in Consumer Price Index (CPI) inflation to 7.3% year-on-year in March. The State Bank of Pakistan’s upcoming monetary policy meeting on April 27 is also being closely watched. This downturn follows a volatile previous session where the KSE-100 had surged over 4.5%, highlighting the current market instability.
