Selling pressure intensified at the Pakistan Stock Exchange (PSX) on Tuesday as investors reacted to rising uncertainty.
The benchmark KSE-100 Index fell more than 1,100 points during the opening minutes of trading. At 9:35am, the index stood at 180,156.77 points. It was down 1,153.51 points, or 0.64%.
The decline came as hopes faded for a deal between the United States and Iran. Investors are also watching developments surrounding the reopening of the Strait of Hormuz.
Key Sectors Trade in the Red
Selling pressure appeared across several major sectors during early trading. Automobile assemblers, cement companies and commercial banks remained under pressure.
Fertiliser stocks also traded lower. Meanwhile, oil and gas exploration companies and oil marketing companies faced selling. Several index-heavy stocks also moved into negative territory.
These included HUBCO, MARI, OGDC, FFC, HBL, MCB, MEBL and UBL. The broad-based selling weighed on the benchmark index during the early session.
PSX Closed Lower in Previous Session
The latest decline followed a marginal fall in the previous trading session. On Monday, profit-taking in key heavyweight stocks erased the market’s early gains.
Consequently, the KSE-100 Index ended 119.74 points lower. The benchmark declined 0.07% to settle at 181,310.28 points. Tuesday’s early decline therefore marked a sharper move compared with the previous session.
US-Iran Talks Keep Markets on Edge
Global market sentiment remained fragile as uncertainty surrounding US-Iran negotiations continued. Oil prices climbed on Tuesday as discussions over a peace deal reached an impasse.
Negotiations also focused on reopening the Strait of Hormuz, a key waterway for global energy supplies. US President Donald Trump responded on Monday to Iran’s conditions for a potential peace agreement.
He presented demands that Iran pay compensation for people killed in wars, attacks and protests. The rhetoric added further uncertainty to efforts aimed at reopening the waterway.
As a result, investors continued to monitor developments closely.
Oil Prices Reach Highest Level Since July 31
The latest geopolitical uncertainty also pushed oil prices higher.
Brent crude futures rose to $88.00 per barrel. US crude futures increased to $82.45 per barrel. Both contracts reached their highest levels since July 31. The latest gains followed a rally of around 5% on Monday.
Higher oil prices could add further pressure to market sentiment. Investors are also watching their potential impact on inflation.
The increase in fuel costs has raised the stakes for the US July consumer price report.
The report is due on Wednesday. Expectations point to a 0.1% monthly increase in the headline reading. Meanwhile, the core measure is expected to rise 0.2%.
Asian Markets Remain Cautious
Asian markets also reflected the uncertainty surrounding global economic conditions.
MSCI’s broadest index of Asia-Pacific shares outside Japan moved between gains and losses. The index was last up 0.2%.
South Korea’s Kospi gained 0.3% as investors continued to assess developments.
However, uncertainty linked to the Gulf hostilities kept broader market sentiment fragile. US markets also showed mixed signals ahead of trading.
Nasdaq futures gained 0.28%. Meanwhile, S&P 500 futures added 0.1%. The moves followed a weaker Wall Street session on Monday.
Investors Watch Geopolitical Developments
The KSE-100’s early decline highlights the sensitivity of markets to global geopolitical developments. Investors are closely tracking the US-Iran situation and its potential impact on energy markets.
The Strait of Hormuz remains another key focus for financial markets. Meanwhile, rising crude prices have added another layer of uncertainty for investors.
At the Pakistan Stock Exchange, selling pressure affected several major sectors during early trading. The KSE-100 Index consequently remained under pressure after opening lower on Tuesday.
Market sentiment will continue to depend on developments surrounding the US-Iran talks, oil prices and regional tensions.
