Renewed hostilities between the United States and Iran sparked a major stock market retreat today. Consequently, intense selling pressure returned to the Pakistan Stock Exchange (PSX) on Friday, May 8, 2026. The benchmark KSE-100 Index shed nearly 1,500 points during the second half of the trading session.
PSX Takes a Massive Hit: KSE-100 Index Drops
Just yesterday, the market hit record highs. The benchmark index gained 1,189.52 points, or 0.69%, to close firmly in positive territory at 172,894.28 points. However, the sudden shift in global stability quickly erased those gains. By 3:35 pm today, the index plunged 1,450.74 points. It hovered at 171,443.53, reflecting a 0.84% drop.
Investors rapidly offloaded shares across key sectors. Automobile assemblers, cement, commercial banks, and fertiliser companies took heavy losses. Similarly, oil and gas exploration firms, OMCs, and power generation companies faced sharp declines. Index-heavy stocks traded entirely in the red. These prominent stocks included MARI, OGDC, PPL, POL, FFC, MCB, MEBL, and UBL.
Behtari Capital highlighted this sudden market shift. They warned of further technical selling heading into next week. To prevent this, diplomatic channels, currently mediated via Pakistan, must signal a de-escalation before the closing bell.
Global Markets & Oil Prices React
The geopolitical strain immediately impacted international commodities. Benchmark Brent crude futures jumped 1.3% to hit $101.60 a barrel. Meanwhile, European stock futures fell by 0.7%.
Asian stock markets also slipped slightly from their recent record highs. Previously, booming AI demand swept up chipmakers, driving stellar weekly gains across the region. MSCI’s broadest index of Asian shares outside Japan dropped 0.8%. South Korea’s KOSPI fell by the same margin. Despite this dip, the KOSPI remains on track for its largest weekly gain since 2008 at over 12%, heavily fueled by surging Samsung and SK Hynix shares. Furthermore, Taiwan’s benchmark climbed 6.9% this week, while Japan’s Nikkei gained 4.5%.
Ceasefire Under Pressure
On Thursday, the US and Iran exchanged fire. This incident served as the most serious test yet of their month-long ceasefire. Fortunately, both nations quickly signaled a desire to avoid further conflict. Iran stated that the situation has returned to normal. Simultaneously, the US clarified it does not want to escalate the situation. President Donald Trump confirmed the ceasefire remains in effect. Ultimately, this sustains global hopes for a peaceful, negotiated resolution.
