Bloodbath at PSX as KSE-100 loses 6,400 points over renewed US-Iran fighting – Business

The Pakistan Stock Exchange’s (PSX) benchmark index lost more than 6,400 points on Tuesday as equities experienced a massive meltdown amid renewed fighting between the United States and Iran.

The KSE-100 index opened in the red and had lost 3,464.89 points at 10am, dropping to 176,462.15 points from the previous close of 179,927.04.

During the day, the market witnessed minor fluctuations, followed by a steep decline after 2:30pm.

Finally, the index closed at 173,518.81 points, down 6,408.23 points (3.56 per cent) from the previous close.

The decline came as global oil prices rose to their highest in four weeks on Tuesday, as the US reimposed its naval blockade of Iran while the two countries stepped up attacks in the Strait of Hormuz, heightening uncertainty about energy flows.

Brent crude futures were up $2.89, or 3.47pc, at $86.19 per barrel at 5pm PKT, while US West Texas Intermediate crude rose $1.53, or 1.96pc, to $79.67 a barrel.

Oil prices are now at their highest since the two countries signed a memorandum of understanding to end the war on June 18.

Topline Securities Ltd noted that the sharp sell-off was driven by “heightened geopolitical tensions after the reported collapse of the interim peace arrangement between the US and Iran”.

“Investor sentiment deteriorated following reports that the US reimposed a naval blockade and conducted airstrikes, while Iran responded by targeting additional oil tankers transiting the Strait of Hormuz,” the brokerage house said.

It observed that the escalation fuelled concerns over regional stability, potential disruptions to global oil supplies, and increased risk aversion across financial markets, prompting broad-based selling at the PSX.

The largest negative contribution to the index came from United Bank Limited (UBL), Engro Holdings, Fauji Fertiliser Company, Lucky Cement and Meezan Bank, which “collectively shaved 2,057 points off the benchmark index”, Topline noted.

Awais Ashraf, director of research at AKD Securities, also noted that the market crash followed the US reinstating its naval blockade of Iran.

“The decline is broad-based, with cyclical sectors witnessing the sharpest percentage losses amid heightened uncertainty over the medium-term outlook due to the emerging geopolitical situation,” he said.

The PSX had come under pressure on Monday as equity investors grew nervous over developments in the Strait of Hormuz, dragging the benchmark KSE-100 index below the psychological barrier of 180,000 points.

The benchmark KSE-100 index remained under pressure throughout the session, touching an intraday low of 2,793 points before closing at 179,927, down 2,314 points or 1.27pc.

The decline was further exacerbated by broad-based profit-taking after the market’s recent rally, as investors chose to lock in gains despite an otherwise supportive macroeconomic backdrop.

World stocks dip