Stocks fell sharply in intraday trade on Monday as renewed hostilities between the US and Iran, worsening tensions in the Middle East and a jump in global oil prices triggered selling pressure on the Pakistan Stock Exchange (PSX).
The benchmark KSE-100 index hit an intraday low of 179,448.52, down 2,793.25 points, or 1.53%, from the previous close of 182,241.77. Its intraday high was 180,597.14, still down 1,644.63 points, or 0.90%.
“PSX fell over 1% due to Iran’s escalation and worsening tensions in the Middle East,” Ahsan Mehanti, managing director and CEO of Arif Habib Commodities, told Pakinomist.tv.
Mehanti said investors’ fear of inflation amid a rise in global crude oil prices and the potential impact on Pakistan’s external account played a catalytic role in the selling pressure.
Ismail Iqbal Securities also expected the market to remain under pressure as geopolitical tensions continued to escalate alongside rising oil prices.
“Sentiment is likely to remain sensitive to any new developments on the geopolitical and macroeconomic fronts,” the brokerage said.
“The market opened lower as renewed hostilities between the US and Iran drove up oil prices, prompting investors to adopt a cautious stance,” said Huzaifa Riaz, director at Mayari Securities (Pvt) Limited.
“Despite the prevailing geopolitical uncertainty, support emerged at lower levels in anticipation of renewed diplomatic talks once the escalation subsides,” he added.
Oil prices rose more than 4% on Monday after another flare-up between the US and Iran threatened their already fragile ceasefire.
The renewed hostilities followed last week’s shootout and came as negotiators struggled to reach a lasting peace deal to keep the Strait of Hormuz open.
The US military launched a new wave of attacks on Sunday after several of Washington’s Gulf allies were hit by incoming fire in renewed fighting over the waterway.
Both key oil contracts rose as much as 4.5%, fueling renewed concerns that inflation could force central banks to raise interest rates.
The renewed fighting followed an Iranian attack early Sunday on a commercial ship in the strait, the crew of which was forced to abandon it after it burst into flames.
Iran’s Revolutionary Guards said after the incident that “the Strait of Hormuz will be closed for the time being and until the end of US interventions in this region,” according to the state news agency IRNA.
However, United States Central Command said on X that the strait was “open to all vessels seeking lawful transit”.
US officials said about 20 vessels had been escorted through the strait in the previous 24 hours, although ship tracking sites showed little traffic.
Monday’s fall reversed the gains from the previous session. The PSX had closed higher on Friday as the KSE-100 index gained 982.10 points, or 0.54%, to settle at 182,241.78. The index hit an intraday high of 183,477.57 and a low of 181,880.55 during Friday’s session.
