ISLAMABAD: Pakistan’s stock market suffered a big blow today and lost over 6000 points as escalating US–Iran tensions undermined investor sentiment and triggered selling.
The benchmark KSE-100 Index initially opened on a positive note and climbed to an intraday high of 188,923.39, gaining 543.01 points, or 0.29%. However, the mood quickly reversed as risk aversion intensified.
Consequently, the index plunged to a session low of 181,961.14, reflecting a massive decline of 6,419.24 points, or 3.41%.
Market analysts said investors reacted nervously to the possibility of a direct conflict between the United States and Iran. They explained that traders closely monitored geopolitical developments and chose to reduce exposure amid rising uncertainty. Moreover, analysts noted that weaker-than-expected earnings from Fauji Fertiliser Company added further pressure. The stock hit the lower lock, which accelerated selling and erased nearly 3,500 points in a short span.
Soomro added that the correction appeared timely because the ongoing earnings season has failed to excite investors. Therefore, many participants viewed the decline as a consolidation phase rather than a complete loss of confidence.
Policy signals and global risks shape market direction
Meanwhile, political developments continued to influence market direction. US President Donald Trump warned Iran that time was running out to avoid possible military action. He highlighted the presence of a US naval strike group in regional waters and urged Tehran to engage in talks over its nuclear programme. As a result, regional risk premiums climbed and weighed further on equities.
On the domestic front, the State Bank of Pakistan recently maintained the policy rate at 10.5% for the second consecutive month. The central bank cited December headline inflation of 5.6% and stable core inflation around 7.4%. It also acknowledged improving economic activity, a wider trade deficit due to higher imports, and a contained current account supported by remittances.
Earlier on Wednesday, the KSE-100 Index had closed slightly higher at 188,380.39, gaining 177.53 points, before Thursday’s sharp reversal.
