The Pakistan Stock Exchange (PSX) came under heavy selling pressure on Tuesday as renewed uncertainty over a potential US-Iran deal pushed oil prices higher and weighed on investor sentiment.
The benchmark KSE-100 Index fell more than 1,100 points in early trading before recovering slightly. By 2:45pm, the index was trading at 180,287.92 points, down 1,022.36 points, or 0.56%, from the previous close.
Selling pressure was broad-based, with major declines witnessed in commercial banks, cement, automobile assemblers, chemicals, fertiliser, oil and gas exploration companies, oil marketing companies (OMCs), and power-sector stocks.
The market remained under pressure after hopes for an agreement between Washington and Tehran weakened. US President Donald Trump’s demand for compensation from Iran appeared to complicate efforts to end the conflict and reopen the strategically important Strait of Hormuz.
The uncertainty also triggered a sharp rise in global oil prices. Brent crude futures climbed $1.92, or 2.19%, to $89.64 per barrel, while West Texas Intermediate (WTI) futures increased $1.91, or 2.33%, to $84.04 per barrel.
Both oil benchmarks reached their highest levels since July 31.
Oil prices had already surged by more than 5% on Monday after Trump responded to Iran’s conditions for a peace agreement with demands for compensation. Concerns over the continued disruption of shipping through the Strait of Hormuz further intensified market fears.
Shipping data showed that only six vessels passed through the Strait of Hormuz on Monday, compared with a 10-day average of around 11 vessels.
The Strait is critical to global energy markets, with roughly one-fifth of the world’s daily oil and liquefied natural gas supplies passing through the waterway before the Iran conflict began in late February.
Global markets also remained cautious. Asian equities traded mixed, while South Korea’s KOSPI gained 1.3% and Hong Kong’s Hang Seng Index declined 0.6%. US equity futures pointed to a modest recovery after Wall Street closed lower on Monday.
For Pakistan, prolonged disruption in the Strait of Hormuz and sustained higher oil prices could increase import costs, put pressure on inflation and the external account, and continue to weigh on investor confidence at the PSX.
