PSX comes under selling pressure, sheds 1,003.40 points by midday
A stock broker reacts while monitoring the market on the electronic board displaying share prices during trading session at the Pakistan Stock Exchange, in Karachi on July 3, 2023. Photo: Reuters/ File
The Pakistan Stock Exchange (PSX) came under renewed selling pressure on Monday, with the benchmark KSE-100 index losing 1,003.40 points or 0.57% to 174,325.42 by 1:29 pm midday, as rising oil prices and heightened geopolitical tensions over the Strait of Hormuz weighed on investor sentiment.
The index opened the week on a fragile note, falling 429.59 points, or 0.25%, to 174,899.23 at 9.39am in early trading. It later oscillated between an intraday high of 175,353.67 and a low of 174,313.12.
Selling pressure was witnessed across key sectors, including oil marketing companies (OMCs), automobile assemblers, cement, commercial banks and refineries.
Market activity remained active, with around 100.91 million shares changing hands by midday. The traded value stood at approximately Rs5.87 billion.
The previous close of the KSE-100 stood at 175,328.82.
The pressure in the local market came against a backdrop of rising international oil prices. Oil prices rose by more than $1 a barrel on Monday as tit-for-tat strikes between the United States and Iran involving vessels sailing through the Strait of Hormuz and other areas heightened concerns over a prolonged disruption to Middle Eastern oil supplies.
Read: Geopolitical tensions drag stocks down
Iran also said it would announce a new restricted zone in the Gulf in the coming days, along with maps for a new shipping corridor through the Strait of Hormuz. The announcement followed a weekend exchange of strikes involving shipping, further raising concerns in global energy markets.
Higher oil prices are particularly important for Pakistan's equity market given their potential implications for the country's import bill, inflation and external financing requirements, while also raising concerns over corporate margins in oil-sensitive sectors.
The KSE-100's decline therefore reflected a combination of geopolitical uncertainty, higher global oil prices and broad-based profit-taking, with investors remaining cautious amid heightened external risks.