The stock market came under selling pressure on Monday as fresh escalation in the Middle East pushed crude prices higher, fueling concerns over Pakistan’s external account, interest rate outlook and pre-budget uncertainty.
During the session, the Pakistan Stock Exchange’s benchmark KSE-100 touched an intraday high of 169,360.54, down 1,118.4 points, or 0.66 percent, and a low of 168,432.45, reflecting a decline of 2,046.49 points, or 1.2 percent, from the previous close of 170 478.94.
“The 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.
“Pre-budget uncertainty and investor expectations of a rise in global crude oil prices are impacting the external account, and a possible rise in interest rates has played a catalytic role in selling pressure on PSX,” it added.
Brent oil prices jumped more than $3 a barrel on Monday, initially spooked by the launch of new Israeli strikes on Lebanon a day earlier, before gaining momentum after sounds of explosions were heard in Iran.
Local media reported sounds of explosions in Tehran, Tabriz and Isfahan early Monday, eroding hopes of an imminent end to the broader war and a resumption of oil flows across the Strait of Hormuz.
Brent crude futures rose $3.20, or 3.39 percent, to $96.24 a barrel, while U.S. crude futures rose $2.87, or 3.17 percent, to $93.41 a barrel by 0333 GMT.
The gains erased losses from Friday, when prices fell on hopes of a de-escalation of the U.S.-Iran conflict, which has sent oil prices soaring more than 50% since March.
Iran fired a salvo of missiles at Israeli targets in retaliation on Sunday, although US President Donald Trump insisted a deal to end the war as a whole remained within reach.
Trump also reportedly asked Israeli Prime Minister Benjamin Netanyahu to refrain from further attacks, telling the Financial Times: “This will have no impact on the agreement.”
Asian stocks also plunged Monday as investors pulled out of AI-related stocks over concerns the bullish trend had gone too far and too quickly, while fresh hostilities in Iran pushed oil prices higher.
South Korea’s chip-heavy KOSPI led regional losses with a 5% decline, while Japan’s Nikkei fell nearly 4% and Taiwan’s benchmark index fell 3.9%.
The regional selloff follows last week’s disappointing outlook from chipmaker Broadcom and a better-than-expected U.S. jobs report, which led traders to price in the possibility of a rate hike this year.
In the previous session, the KSE-100 index closed lower, losing 696.57 points, or 0.41 percent, to settle at 170,478.94 against the previous close of 171,175.51.
The index touched an intraday high of 172,102.91 and a low of 170,254.65 during Friday’s session.
