The Pakistan Stock Exchange (PSX) saw heavy selling on Thursday as geopolitical tensions escalated following US President Donald Trump’s warning of continued attacks on Iran. The benchmark KSE-100 Index dropped sharply by 5,344.44 points, or 3.44%, to hover at 150,167.12 in early trading.
Market analysts said the sharp decline wiped out the gains from Wednesday’s rally, which had pushed the KSE-100 past the 150,000-point mark amid optimism over easing tensions in the Middle East. Behtari Capital described Thursday’s trading as a harsh reality check, with the market reacting to a “triple threat” of escalating US-Iran conflict, rising oil prices, and surging inflation.
The latest data showed Pakistan’s CPI inflation climbing to 7.3%, increasing concerns over rising energy costs and reducing hopes for an interest rate cut by the State Bank of Pakistan in the near term. Selling was particularly strong in sectors including automobile assembly, cement, commercial banking, oil and gas exploration, OMCs, and power generation. Heavyweights such as MARI, OGDC, POL, PPL, MCB, MEBL, NBP, and UBL traded in the red.
Globally, financial markets also reacted to Trump’s speech, which said the US had nearly completed its strategic objectives in Iran but would continue to strike the country “extremely hard” over the coming weeks. Following the address, US stock futures fell, European futures dropped slightly, and Asian markets, including MSCI’s Asia-Pacific index and Japan’s Nikkei, also experienced losses.
Investors are closely monitoring the situation in the Strait of Hormuz, a crucial route for global oil and LNG shipments. Iran has repeatedly targeted Gulf countries hosting US bases and is leveraging control over the strait, which carries roughly a fifth of the world’s oil, contributing to uncertainty in fuel supplies and financial markets.
The sharp decline at PSX reflects rising concern among investors over the widening conflict and its impact on the economy, particularly as energy prices and inflationary pressures continue to mount.
