The Pakistan Stock Exchange (PSX) witnessed a significant downturn on Monday, with the benchmark KSE-100 Index shedding over 2.7% as investor sentiment was rattled by escalating US-Iran tensions and a sharp jump in global oil prices.
Market in Retreat
The KSE-100 Index crashed to an intraday low of 169,226.56 points, marking a steep decline of 4,712.45 points, or 2.71%, from the previous close of 173,939.01. The index had opened slightly higher but quickly reversed gains amid a wave of selling pressure.
Geopolitics and Oil Prices Drive Sell-Off
Analysts attributed the bearish activity to a confluence of negative factors. “Stocks witnessed selling amid concerns over reignited US-Iran tensions,” said Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities. He added that surging government bond yields, falling global equities, and the surge in global crude oil prices played a catalyst role.
The uncertainty stems from Iran’s foreign ministry stating it has no immediate plans for a second round of negotiations with the United States. This was compounded by reports that Iran had again closed the strategic Strait of Hormuz over the weekend, a critical chokepoint for global oil shipments, citing a US blockade of its ports.
Oil Markets on Edge
The geopolitical flare-up sent shockwaves through energy markets. Oil prices surged, with West Texas Intermediate (WTI) jumping more than 7% at one point and Brent crude adding over 6%. This spike followed reports of a naval incident involving an American destroyer and an Iranian vessel.
Sharp Reversal from Friday’s Rally
Monday’s plunge marked a stark reversal from the previous trading session. On Friday, the PSX had staged a strong rally, with the KSE-100 index surging 4,027.06 points, or 2.37%. The rapid shift underscores the market’s heightened sensitivity to external geopolitical and economic shocks.
