PSX tumbles 2,541 points as oil shock rattles sentiment

Middle East tensions trigger broad-based selling as KSE-100 settles below 168,000

KARACHI:

The Pakistan Stock Exchange (PSX) began the new week on a sharply negative note on Monday as escalating Middle East tensions and growing concerns over oil supplies sent the benchmark KSE-100 Index into a broad-based sell-off, falling 2,541.20 points, or 1.49%, to settle at 167,970.66, compared with the previous close of 170,511.86.

The decline came as crude prices surged amid mounting concerns over disruptions to global energy supplies, raising fears about the impact of higher oil costs on economies and corporate profitability. The renewed pressure on energy markets also kept investors cautious at the start of the trading week.

The benchmark remained under pressure throughout the session, hitting an intraday high of 170,437.73 and a low of 167,441.64.

Middle East diplomacy appeared to falter ahead of Monday, with the postponement of a meeting between Iran and other Gulf powers adding to uncertainty. Meanwhile, attacks around the region’s two key oil transit routes intensified concerns over the security of global energy supplies, further weakening investor risk appetite.

The deterioration in the external risk environment triggered selling across the market, with investors reducing exposure to equities amid uncertainty over the potential economic fallout from prolonged regional tensions and elevated oil prices.

Trading activity remained active, with investors exchanging a substantial volume of shares as selling pressure persisted through the session.

According to Ahmed Sheraz of KTrade Securities, the KSE-100 Index closed at 167,970 points, down 2,541 points, or 1.49% day-on-day, as selling pressure remained dominant throughout the session.

Read: Oil prices up over 3% following new strikes on Saudi, Strait of Hormuz

The decline was broad-based, with commercial banking, cement, fertiliser, and oil & gas sectors contributing negatively. United Bank, Fauji Fertiliser, Lucky Cement, and the Oil and Gas Development Company were among the major laggards, adding to the overall market weakness.

Market sentiment remained under pressure as international oil prices continued to surge. Brent crude traded close to $109 a barrel, while the delay in negotiations involving Iran, the Gulf states, and the United States further weighed on sentiment.

Persistently elevated oil prices remain a key risk to Pakistan’s external account, inflation outlook, and overall market confidence. However, a potential breather emerged after market close as the State Bank of Pakistan (SBP) kept the monetary policy rate unchanged. The decision provides some stability amid ongoing external uncertainty and could support selective interest in cement, steel, and other cyclical stocks. 

Going forward, the index is likely to remain volatile and sensitive to oil prices, with a sustained decline in crude prices or meaningful progress in regional negotiations needed to support a stronger market recovery, Sheraz wrote.

Overall, trading volume decreased to 570.4 million shares from Friday’s total of 687.4 millon while the value of traded shares stood at Rs24.6 billion. In the ready market, shares of 492 companies were traded, of which 83 stocks closed higher, 373 fell and 36 remained unchanged.

Cnergyico Pk was the volume topper with trading in 97.2 million shares, losing Rs0.12 to close at Rs12.81.