The Pakistan Stock Exchange (PSX) surrendered its early gains on Monday as uncertainty surrounding a potential US-Iran peace deal and the reopening of the Strait of Hormuz triggered selling pressure across key sectors.
The benchmark KSE-100 Index initially surged more than 700 points, reaching an intraday high of 182,347.50 points in the early trading session.
However, the market reversed course after midday, with the index coming under selling pressure and losing more than 500 points at one stage.
The KSE-100 ultimately settled at 181,310.28 points, down 119.74 points from the previous close.
Selling was witnessed across several major sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration companies, and power generation companies.
The market initially received support from fresh economic data showing a strong increase in overseas remittances.
According to State Bank of Pakistan (SBP) data, Pakistan received $3.631 billion in remittances during July 2026, representing a 13% year-on-year increase and a 4.5% rise compared with June.
The positive remittance figures helped support investor sentiment during the opening hours before geopolitical concerns triggered renewed caution.
Investor attention remains focused on developments involving Iran, the United States and the Strait of Hormuz, a critical global shipping route.
Iran has indicated that the waterway would only reopen after the United States meets several conditions, keeping uncertainty elevated over the timing of any broader agreement.
The geopolitical developments had previously supported a strong recovery at the PSX. During the previous week, the KSE-100 gained 5,335.89 points, or 3%, to close at 181,430.02 points as diplomatic developments surrounding the Strait of Hormuz eased some concerns.
Brokerage firms have said that improving economic indicators, easing geopolitical tensions and the ongoing corporate earnings season could support the stock market in the coming weeks. However, risks related to the Middle East conflict and domestic political developments remain key factors for investors.
Global equity markets were broadly positive on Monday, with Europe’s Stoxx 600 rising 0.1%, while S&P 500 and Nasdaq futures gained 0.2% and 0.4%, respectively.
In Asia, Japan’s Nikkei increased 2.1%, while South Korea’s benchmark gained 0.7%.
Oil prices remained relatively stable amid uncertainty surrounding the reopening of the Strait of Hormuz. Brent crudewas trading at around $83.74 per barrel, while US West Texas Intermediate (WTI) stood at approximately $78.21 per barrel.
Both benchmarks had fallen more than 7% during the previous week on expectations that Iran and Oman could reach an agreement facilitating the reopening of the strategic waterway.
The Strait of Hormuz is a crucial energy route through which roughly one-fifth of global oil and liquefied natural gas supplies passed before the latest Middle East conflict, making developments around its reopening particularly important for global energy markets and investor sentiment.
