Rising geopolitical tensions and soaring global oil prices fueled heavy selling at the Pakistan Stock Exchange, with investors fearing higher inflation and increased economic pressure.
Pakistan’s stock market came under intense selling pressure on Monday as escalating military tensions between the United States and Iran, along with a sharp increase in global oil prices, rattled investor confidence and raised concerns over Pakistan’s economic outlook.
The benchmark KSE-100 Index at the Pakistan Stock Exchange (PSX) plunged as much as 2,793.25 points, or 1.53%, during intraday trading to 179,448.52 points from the previous close of 182,241.77. The market later recovered part of its losses, reaching an intraday high of 180,597.14 points, though it still remained down 1,644.63 points, or 0.90%.
Market participants attributed the decline to fears that the widening conflict in the Middle East could disrupt global energy supplies, push oil prices higher and intensify inflationary pressures on Pakistan’s economy.
Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, said heightened geopolitical risks triggered widespread profit-taking and defensive selling, while rising crude oil prices increased concerns over Pakistan’s import bill and balance of payments.
Brokerage firm Ismail Iqbal Securities said investor sentiment is likely to remain fragile until geopolitical tensions ease, with markets closely watching international developments and domestic economic indicators.
Huzaifa Riaz, Director at Mayari Securities (Pvt) Limited, noted that although the market opened sharply lower, buying interest emerged at reduced levels as some investors expect diplomatic efforts could eventually ease tensions.
The sell-off followed a more than 4% jump in international oil prices after renewed military exchanges between Washington and Tehran raised concerns over shipping security in the Strait of Hormuz, a vital global oil transit route. The decline also erased part of Friday’s gains, when the KSE-100 Index had closed 982.10 points higher.
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