PSX Plummets and Oil Prices Spike on Regional War Fears

The Pakistan Stock Exchange (PSX) saw a massive sell-off on Monday, with the benchmark KSE-100 index plunging by nearly 3,800 points in its seventh consecutive losing session as fears of a wider conflict in the Middle East rattled investor confidence.

The KSE-100 index dropped by 3,791.05 points, or 2.29 per cent, to close at 161,805.02. The market remained in negative territory throughout the day, hitting an intraday low of 161,613.51 points shortly before closing after an early high of 164,939.08.

Investor sentiment has been severely depressed by a lack of tangible progress in US-Iran negotiations and concerns over the fragile situation in the Strait of Hormuz, fuelling fears of significant disruptions to global oil supplies. This anxiety has pushed international oil prices to two-week highs, with Brent crude crossing $112 per barrel and US oil climbing to between $105 and $107 a barrel. The elevated crude prices further weighed on market confidence in Pakistan.

Heavyweight stocks bore the brunt of the selling pressure, with Oil & Gas Development Company Limited (OGDC), Meezan Bank Limited (MEBL), United Bank Limited (UBL), Pakistan Petroleum Limited (PPL), and Engro Holdings Limited (ENGROH) collectively contributing 1,159 points to the index’s sharp decline. Despite the downturn, market activity remained healthy, with a total traded volume of 499.8 million shares and a market turnover of Rs19.4 billion.

The recent slump extends last week’s losses, which had already dragged the KSE-100 below its pre-war level. Analysts expect market performance to remain closely tied to geopolitical developments, particularly the trajectory of US-Iran talks and international oil prices, with investor activity also likely to stay cautious ahead of the upcoming federal budget.