PSX plunges 7% as oil price shock triggers market halt

Pakistan’s stock market came under intense selling pressure on Monday as a surge in global oil prices sparked panic in equities, sending the benchmark KSE-100 Index down 7% even after a market halt.

The benchmark index plunged to 147,715.95 at the opening minutes, down 9,780.15 points or 6.21% from the previous close. Following the decline, trading was suspended under PSX regulations after the KSE-30 Index fell by more than 5% from the previous trading day’s close.

“All TRE Certificate Holders are hereby informed that due to a 5% decrease in the KSE-30 index from the previous trading day close of the same, a Market Halt has been triggered as per PSX Regulations and all equity-based markets have been suspended accordingly,” the exchange said in a notice.

Trading resumed at 10:30 am, but the index plunged further to as low as 144,119.43, shedding 13,376.67 points. At close, the index settled at 146,480.14, down by 11015.96 points or 6.77% from the previous close.  

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Across-the-board selling was observed in major sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration companies, oil marketing companies, power generation and refineries. Index-heavy stocks such as MCB, MEBL, NBP, MARI, OGDC, PPL, PSO, SNGPL, SSGC and HUBCO traded in the red.

Market participants attributed the sharp decline to rising global oil prices, their impact on domestic buyers, and growing geopolitical tensions in the Middle East. On Friday, the federal government announced a Rs55 per litre hike in petrol and high-speed diesel prices, citing the Hurmoz disruptions.

On Monday, Brent crude jumped 23% to $114.36 per barrel, marking one of the largest daily gains in decades and adding to last week’s 28% increase. US crude rose 27% to $115.11 per barrel, raising concerns about higher fuel prices and inflation globally.

Analysts said the PSX reacted quickly to heightened risk, prompting investors to shift toward liquidity and capital preservation. They noted that restoring investor confidence would depend largely on a de-escalation of regional tensions, which currently shows little sign of easing.

They also cautioned that persistently high oil prices could place additional pressure on Pakistan’s external account and trigger another round of inflation if global commodity prices remain elevated.

The latest decline follows losses recorded last week, when the KSE-100 Index fell 10,566.08 points, or 6.3%, to close at 157,496.09 compared with 168,062.17 points a week earlier.

Global markets also came under pressure as oil prices surged sharply amid concerns about supply disruptions linked to the Middle East conflict. Asian markets declined on Monday as rising energy prices and geopolitical tensions drove investors toward safer assets.

Japan’s Nikkei index fell 7.5%, extending losses from the previous week, while South Korea’s market dropped 8.1%. China’s blue-chip index declined 2.3%.

Analysts said continued tensions in the Middle East and concerns over energy supply routes, including the Strait of Hormuz, were likely to keep global markets volatile in the near term.