KSE-100 Comes Under Heavy Selling Pressure
The Pakistan Stock Exchange came under strong selling pressure on Monday as fresh tensions in the Middle East pushed global crude oil prices higher and weakened investor confidence.
The benchmark KSE-100 Index remained under pressure throughout the session. It touched an intraday high of 169,360.54, down 1,118.4 points or 0.66 percent from the previous close.
The index later fell to an intraday low of 168,432.45. This showed a decline of 2,046.49 points or 1.2 percent from the previous closing level of 170,478.94.
Market participants said the selling was mainly driven by fears that a prolonged regional conflict could increase Pakistan’s import bill and worsen pressure on the external account.
Investors were also cautious ahead of the upcoming federal budget. Concerns over possible tax measures, inflation risks and the interest-rate outlook further affected sentiment.
Oil Price Spike Adds Pressure on Market
Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, said the PSX fell by more than 1 percent because of the Iran escalation and worsening Middle East tensions.
He said pre-budget uncertainty and expectations of a sharp rise in global crude oil prices played a major role in the market decline. He added that concerns over the external account and a possible interest rate hike also contributed to the selling pressure.
Brent crude prices jumped by more than $3 a barrel on Monday. The rise came after renewed Israeli strikes on Lebanon and reports of explosions in Iran.
Local media reported sounds of blasts in Tehran, Tabriz and Isfahan early Monday. These developments reduced hopes for an early end to the wider conflict and raised concerns over crude oil flows through the Strait of Hormuz.
Brent crude futures rose $3.20, or 3.39 percent, to $96.24 a barrel. US crude futures gained $2.87, or 3.17 percent, to reach $93.41 per barrel.
The latest rise erased Friday’s losses, when oil prices had declined on hopes of de-escalation in the US-Iran conflict.
Regional Markets Also Face Pressure
The pressure was not limited to Pakistan. Asian stock markets also declined on Monday as investors moved away from riskier assets.
South Korea’s chip-heavy KOSPI fell by 5 percent. Japan’s Nikkei dropped almost 4 percent, while Taiwan’s benchmark index lost 3.9 percent.
The regional sell-off followed concerns that the rally in artificial intelligence-linked stocks had moved too far, too fast. A disappointing outlook from chipmaker Broadcom and a stronger-than-expected US jobs report also added to investor worries.
The US jobs data raised expectations that interest rates may stay higher for longer, with some traders even pricing in the possibility of a rate hike this year.
In Pakistan, the KSE-100 had already closed lower in the previous session. On Friday, the index lost 696.57 points, or 0.41 percent, to settle at 170,478.94.
With oil prices rising, regional tensions deepening and budget uncertainty increasing, investors are expected to remain cautious in the coming sessions.
