Oil, Hormuz jitters send PSX down 1,464 points

KSE-100 loses 0.81% in second straight fall as fading US-Iran deal hopes weigh on investor sentiment

KARACHI:

The Pakistan Stock Exchange (PSX) extended its losing streak for a second consecutive session on Tuesday, with the benchmark KSE-100 index plunging 1,463.60 points, or 0.81%, amid a sharp rise in oil prices and fading hopes of a US-Iran deal that could reopen the Strait of Hormuz.

The selling pressure dragged the benchmark below the 180,000-point mark, with investors turning cautious as renewed uncertainty over oil supplies and regional tensions clouded the market outlook.

The benchmark briefly climbed to an intraday high of 181,017.29 before selling pressure intensified, pulling it down to a low of 179,778.99. The index ultimately settled at 179,846.68, slipping back below the key 180,000-point level.

The renewed weakness came as investors weighed the potential economic fallout from higher energy costs, with uncertainty over the duration of the Strait of Hormuz disruption adding another layer of risk to an already cautious market.

The latest retreat also erased a sizeable portion of the benchmark’s recent gains, signalling that investors are becoming increasingly selective as geopolitical risks regain prominence and the oil-price outlook turns less favourable.

Read More: PSX falls over 1,100 points as fading hopes of US-Iran deal weigh on investors

Tuesday’s selling pressure reflected a broader shift towards caution, as market participants reassessed positions against the backdrop of elevated geopolitical uncertainty and the prospect of sustained pressure on global energy markets.

According to KASB KTrade’s Ahmed Sheraz, the index closed at 179,846 points, down 1,463 points (-0.81%) day-on-day, as renewed geopolitical concerns and higher oil prices weighed on investor sentiment. The session remained broadly negative, with Fauji Fertiliser, Engro Holdings, Lucky Cement, United Bank, Bank Al Habib, Oil & Gas Development Company and Hub Power among the major index drags. 

Sector-wise, cement, fertiliser, investment banking and oil & gas stocks came under selling pressure, reflecting a cautious approach from investors as rising energy costs revived concerns over margins, inflation and the broader economic impact.

Market sentiment also remained under pressure as oil prices climbed sharply amid renewed uncertainty surrounding the US-Iran situation and the reopening of the Strait of Hormuz. Brent moved close to $90 per barrel, amid fading hopes of a near-term agreement, pushing oil prices higher. Asian equities also faced pressure as investors assessed the inflationary implications of higher energy prices. 

Going forward, volatility is likely to remain elevated, with market direction closely tied to developments on the geopolitical front and movements in oil prices, Sheraz added. 

Overall, trading volume decreased to 860.2million shares from Monday’s total of 917.2million. The value of traded shares stood at Rs38.8billion. Shares of 493 companies were traded. Of these, 148 stocks closed higher, 311 fell and 34 remained unchanged.