ISLAMABAD: Renewed war between the United States and Iran frustrated the stock market investors in Pakistan. The PSX shed 2,314 points at closing on Monday afternoon. Rising geopolitical uncertainty triggered selling at the Pakistan Stock Exchange (PSX), while concerns over inflation and external financing weighed on market sentiment.
The benchmark KSE-100 Index ended the session at 179,927.04, losing 2,314.73 points, or 1.27%, from its previous close of 182,241.77. During trading, the index fell to an intraday low of 179,448.52 before recovering slightly. Its highest level during the session reached 181,148.26, although it remained well below the previous close.
Geopolitical Tensions Pressure Market
Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities, said renewed escalation between the United States and Iran triggered the market decline. He added that higher global crude oil prices increased investor concerns about inflation and their possible impact on Pakistan’s external account, leading to heavy selling.
Similarly, the market could remain under pressure as long as geopolitical tensions persist. Anlysts noted that investor sentiment would stay sensitive to developments in global politics and Pakistan’s macroeconomic environment.
The market opened lower because renewed hostilities pushed oil prices upward and encouraged investors to adopt a cautious approach. However, he added that buying interest emerged at lower levels as some investors anticipated renewed diplomatic efforts once tensions ease.
Oil Price Surge Raises Economic Concerns
Meanwhile, international oil prices climbed more than 4% after another round of military exchanges between the United States and Iran threatened the fragile ceasefire. The renewed conflict followed last week’s hostilities as negotiations over the Strait of Hormuz struggled to produce a lasting agreement. Still, the crude oil prices are below $80 a barrel on Monday.
Iran’s Revolutionary Guards announced that the Strait of Hormuz would remain closed until American military intervention ended. However, the United States Central Command said the strategic waterway remained open to lawful commercial shipping.
The sharp rise in oil prices has increased fears of higher global inflation and possible interest rate hikes, adding further pressure on financial markets, including Pakistan’s stock exchange.
