The Pakistan Stock Exchange (PSX) staged a strong recovery on Friday after the benchmark KSE-100 Index plunged more than 2,600 points in early trading amid heightened Middle East tensions and oil prices above $100 per barrel.
According to PSX data, the KSE-100 fell to an intraday low of 166,141.17 points shortly after the market opened. However, buying interest returned as the session progressed, pushing the index back into positive territory.
The benchmark reached an intraday high of 170,764.79 points before closing at 170,511.85 points, up 1,646.81 points or 0.98% from the previous close.
The recovery was supported by buying across several sectors, including automobile parts and accessories, cement, closed-end mutual funds, exchange-traded funds, leather and tanneries, and oil and gas exploration companies.
The rebound came a day after the market suffered a sharp sell-off. On Thursday, the KSE-100 dropped 3,078.56 points, or 1.79%, to close at 168,865.04 points as renewed US-Iran attacks and rising international oil prices increased concerns over inflation, the external account, and Pakistan’s broader economic stability.
Geopolitical developments remain a key risk for the local equity market. According to Intermarket Securities, investor sentiment is expected to remain sensitive to developments around the Strait of Hormuz, Pakistan’s upcoming International Monetary Fund (IMF) review, and progress on domestic economic reforms.
Pakistan and the IMF are scheduled to begin talks on September 22 for the fourth review of the $7 billion Extended Fund Facility (EFF), along with Article IV consultations.
Meanwhile, global markets also remained under pressure as rising oil prices increased inflation concerns. Asian stocks declined, while government bond yields in several major economies climbed to multi-year highs as investors assessed the possibility of tighter monetary policy.
Brent crude was trading around $105.99 per barrel, while US West Texas Intermediate (WTI) stood at around $101.20 per barrel. Both benchmarks remained on track for weekly gains of more than 10%, reflecting growing concerns over prolonged supply disruptions in the Middle East.
The continued attacks along key shipping routes, including developments around the Red Sea and Strait of Hormuz, are likely to keep oil prices and global investor sentiment under pressure in the near term.
