KSE-100 Index drops more than 6,400 points as rising geopolitical risks and surging oil prices trigger panic selling
KARACHI: Pakistan stock market extended its sharp decline on Tuesday, with the benchmark KSE-100 Index plunging 6,408.23 points, or 3.56 per cent, as escalating tensions between Iran and the United States sparked widespread panic selling and dampened investor confidence.
The benchmark index closed at 173,518.81, down from the previous close of 179,927.04.
During the trading session, the KSE-100 touched an intraday high of 178,112.04 before falling to a low of 173,349.41, highlighting the heightened volatility that gripped the market throughout the day.
The sharp sell-off came as global financial markets reacted to escalating geopolitical tensions in the Middle East, with investors increasingly concerned about potential disruptions to global energy supplies and international trade.
Investor sentiment weakened further amid reports of rising tensions surrounding the Strait of Hormuz, one of the world’s most important oil shipping routes. Market participants fear that any disruption to traffic through the strategic waterway could significantly affect global crude oil supplies and intensify economic uncertainty.
The decline at the Pakistan Stock Exchange (PSX) mirrored losses across international equity markets as investors shifted towards safer assets in response to mounting geopolitical risks.
Analysts said the continued rise in global crude oil prices added to pressure on the local market. Brent crude climbed to nearly USD87 per barrel on Tuesday, fuelling concerns over higher import costs, increased inflationary pressures and a potential deterioration in Pakistan’s external account.
The worsening regional security situation also prompted broad-based risk aversion, with investors reducing exposure to equities amid fears that prolonged tensions could adversely affect Pakistan’s economic recovery and corporate earnings.
Despite the steep decline, trading activity remained healthy. Total traded volume reached 409.23 million shares, while the value of traded shares stood at Rs35.61 billion.
Market participants are expected to remain cautious in the coming sessions as they closely monitor developments in the Middle East, movements in global oil prices and their potential implications for Pakistan’s economy and financial markets.