Stocks fell sharply in intraday trade on Monday as renewed hostilities between the United States and Iran, worsening tensions in the Middle East and rising global oil prices triggered selling pressure on the Pakistan Stock Exchange (PSX).
The benchmark KSE-100 index touched an intraday low of 179,448.52, down 2,793.25 points, or 1.53 percent, from the previous close of 182,241.77. Its intraday high stood at 180,494.21, still down 1,747.56 points, or 0.96%.
“PSX fell more than 1% due to the escalation in Iran and worsening tensions in the Middle East,” said Ahsan Mehanti, managing director and CEO of Arif Habib Commodities. PK Press Club.tv.
Mehanti said investors’ fears over inflation amid rising global crude oil prices and the potential impact on Pakistan’s external account played a catalytic role in the selling pressure.
Ismail Iqbal Securities also expects the market to remain under pressure as geopolitical tensions continue to escalate alongside rising oil prices.
“Sentiment is likely to remain sensitive to any further developments on the geopolitical and macroeconomic fronts,” the brokerage said.
“The market opened lower as renewed hostilities between the United States and Iran pushed up oil prices, prompting investors to adopt a cautious stance,” said Huzaifa Riaz, director, Mayari Securities (Pvt) Limited.
“Despite the prevailing geopolitical uncertainty, support has emerged at lower levels in anticipation of the resumption of diplomatic negotiations once the escalation has subsided,” he added.
Oil prices jumped more than 4% on Monday after a new flare-up between the United States and Iran threatened their already fragile truce.
The resumption of hostilities followed last week’s exchange of fire and came as negotiators struggled to reach a lasting peace deal to keep the Strait of Hormuz open.
The US military launched a new wave of strikes on Sunday after renewed fighting around the waterway, which saw several of Washington’s allies in the Gulf come under incoming fire.
The two major oil contracts rose as much as 4.5%, stoking fresh fears that inflation could force central banks to raise interest rates.
The renewed fighting follows an Iranian attack Sunday morning on a commercial ship in the strait, with the crew forced to abandon it after it caught fire.
Iran’s Revolutionary Guards said after the incident that “the Strait of Hormuz would be closed until further notice and until the end of American interventions in this region”, according to the official news agency. IRNA.
U.S. Central Command, however, told the X that the strait was “open to all vessels seeking legal transit.”
U.S. officials said about 20 ships had been escorted through the strait in the previous 24 hours, although ship tracking sites showed little traffic.
Monday’s fall wiped out gains from the previous session. The PSX closed higher on Friday as the KSE-100 index gained 982.10 points, or 0.54 percent, to settle at 182,241.78. The index touched an intraday high of 183,477.57 and a low of 181,880.55 during Friday’s session.
