PSX drops over 500 points as Middle East tensions weigh on investor sentiment

Selling pressure gripped the Pakistan Stock Exchange (PSX) on Friday as geopolitical tensions in the Middle East and elevated global oil prices weighed on investor sentiment, pushing the benchmark KSE-100 Index down by 555 points to 153,866.16 at closing. 

The market started the session with positive sentiment, but soon bears dominated the trading floor, and the KSE-100 plunged over 1600 points to as low as 152,780.79 by noon. 

Losses were recorded across several sectors, including automobile assemblers, cement, chemicals, commercial banks, fertiliser, and oil and gas exploration companies. Major index-weighted stocks trading in negative territory included HBL, MCB, MEBL, NBP, MARI, OGDC, POL, PPL, PSO, SNGPL, and SSGC.

The decline followed another negative session on Thursday when the KSE-100 Index closed at 154,421.43 points, down 1,437.05 points or 0.92%.

Market sentiment has remained cautious amid geopolitical tensions in the Middle East and volatility in global energy markets.

International markets also showed weakness. Asian equities declined on Friday as concerns over the ongoing conflict between the United States, Israel and Iran kept oil prices elevated.

MSCI’s broad index of Asia-Pacific shares fell 0.5% and was on track for a weekly decline of about 1.5%. Japan’s Nikkei dropped 1.3%, while stocks in South Korea fell nearly 2% and Taiwan’s market declined around 1%.

The US dollar strengthened during the week, rising about 2% since the conflict escalated in late February.

Oil prices remained near the $100 per barrel level. Brent crude was trading at $99.85 per barrel, while US West Texas Intermediate stood at $95.05 per barrel.

Investors are also adjusting expectations for monetary policy, with markets now pricing in about 20 basis points of interest rate cuts from the US Federal Reserve this year compared with expectations of 50 basis points a month earlier.