Geopolitical uncertainty and surging crude prices trigger heavy selling pressure across Pakistan’s equity market.
ISLAMABAD/KARACHI: The Pakistan Stock Exchange (PSX) tumbled sharply on Monday as investors reacted to renewed geopolitical uncertainty following the breakdown of US-Iran talks and a surge in global oil prices.
The benchmark KSE-100 Index fell more than 5,300 points at the opening bell, extending losses throughout the session despite intermittent recovery attempts. By midmorning, the index was down around 4,567 points, reflecting a decline of nearly 2.7 percent. Later, it fluctuated before settling near 161,938.15 points, still 5,253.22 points lower.
Analysts linked the selloff to stalled diplomacy after Islamabad-hosted negotiations between Washington and Tehran failed to produce an agreement, dampening investor confidence across emerging markets.
The risk-off sentiment intensified as oil prices climbed above $104 per barrel amid fears of supply disruptions through the Strait of Hormuz.
Additional pressure stemmed from reports citing heightened maritime tensions after statements attributed to former US President Donald Trump regarding restrictions linked to Iranian ports, further unsettling global energy markets.
Market observers said the combined shock of diplomatic deadlock and energy price volatility prompted institutional investors to reduce exposure to equities. Financial experts warned that short-term volatility could persist unless clarity emerges from ongoing diplomatic channels.
Despite the downturn, some analysts maintained cautious optimism, noting that backchannel efforts involving Qatar and Switzerland could revive dialogue between the US and Iran, potentially stabilizing sentiment in the coming sessions.
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