January 18, 2024

Stocks suffer as tension between Pakistan, Iran escalates

Downturn affected major sectors such as cement, chemicals, commercial banks, OMCs, and power generation

January 18, 2024

Stocks suffer as tension between Pakistan, Iran escalates

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Escalating tensions between Pakistan and Iran negatively impacted investor confidence at the Pakistan Stock Exchange (PSX), leading to a bearish trend during the intraday trade.

The benchmark KSE-100 index declined by 364.93 points to settle at 63,202.40 points or 0.57% as compared to the previous close.

The index opened the trading session at 63,579.96 but at 10:00 am it plummeted to more than 1000 points to the 62,528.55 level. Later on, it recovered to some extent but closed in the red zone.

The downturn was widespread, affecting major sectors such as cement, chemicals, commercial banks, fertilizer, oil and gas exploration, oil marketing companies (OMCs), and power generation, all of which traded lower.

Market analysts attribute the selling pressure to escalating tensions between Pakistan and Iran.

This situation was further exacerbated by a statement from the Ministry of Foreign Affairs (MOFA) that Pakistan retaliated against Iran in a series of coordinated precision strikes targeting terrorist hideouts, an operation named ‘Marg Bar Sarmachar’. The ministry reported that numerous terrorists were eliminated in this intelligence-based operation.

This aggressive move by Pakistan was in retaliation to a prior strike by Iran on Pakistani soil, which, according to Pakistan, resulted in the death of two children and injuries to three girls.

KSE-100 Index