The Pakistan Stock Exchange (PSX) came under heavy selling pressure on Tuesday as renewed Middle East tensions, rising oil prices and concerns over prolonged energy supply disruptions weighed on investor sentiment.
The benchmark KSE-100 Index fell more than 1,000 points in early trading before recovering most of its losses around 11:50 am. Selling pressure then intensified, with the index losing around 2,013 points from that level and falling to an intraday low of 178,488.91 at around 1:00 pm.
At 2:20 pm, the KSE-100 was trading at 179,015.93 points, down 1,486.51 points, or 0.82%, from the previous close.
The decline was broad-based, with selling concentrated in major sectors including automobile assemblers, cement companies, commercial banks, oil and gas exploration firms, oil marketing companies and power generators.
The market’s decline came a day after the KSE-100 posted a modest gain. On Monday, the index rose 397.83 points, or 0.22%, to close at 180,502.45 points, supported by gains in refinery stocks following reports of a multi-billion-dollar refinery modernisation and expansion programme.
Investor sentiment was also affected by growing uncertainty over efforts to end the Middle East conflict. Iran has indicated a more offensive military posture, while the United States has ruled out extending a ceasefire arrangement, increasing concerns about continued disruptions to regional energy supplies.
Global markets also came under pressure. Asian stocks declined while US equity futures weakened. The MSCI Asia-Pacific index excluding Japan fell 0.8%, while South Korea’s KOSPI dropped 2.1% after erasing an early gain of more than 3%. Japan’s Nikkei 225 also declined 2.2%.
US Treasury yields climbed sharply, with the 30-year Treasury yield reaching 5.326%, its highest level in almost two decades.
International oil prices continued to rise amid renewed concerns over energy supply disruptions.
Brent crude futures gained 35 cents, or 0.39%, to $91.22 per barrel by 0827 GMT, while US West Texas Intermediate (WTI) crude rose 81 cents, or 0.96%, to $85.31 per barrel.
Both benchmarks were on track for a third consecutive session of gains, with Brent reaching its highest level since July 30 and WTI touching its highest level since July 31 during Tuesday’s trading.
The combination of higher oil prices and geopolitical uncertainty has increased pressure on risk assets, including Pakistani equities, as investors assess the potential impact on inflation, energy costs and the country’s external account.
Further developments in the Middle East and global oil markets are likely to remain key factors influencing PSX sentiment in the coming sessions.
