PSX turns positive after early drop on Iran deal optimism

Buying returned to the volatile Pakistan Stock Exchange (PSX) in the second half of Monday’s session after early selling pressure, as markets reacted to the reports that Washington and Tehran were reviewing a Pakistani-brokered framework to end their five-week conflict.

According to PSX data, the market opened higher, with the benchmark KSE-100 Index rising more than 900 points to reach 151,453.80 in early trade. Selling pressure then pushed the index down to an intraday low of 147,771.35 before a recovery set in. By around 2:20 pm, the index had rebounded to 151,875.01, up 1,476 points, before easing slightly. 

Key sectors, including fertiliser, mutual funds, cable and electric goods, auto parts and accessories, automobile assemblers, cement, glass and ceramics, insurance and property, traded in positive territory.

At the close, the KSE-100 settled at 151,207.81, showing a gain of 809.10 points, or 0.54%, from the previous close.

A research firm said market sentiment has weakened amid uncertainty linked to US President Donald Trump’s ultimatum to Iran to reopen the Strait of Hormuz or face escalation, alongside signals from the IMF of a possible rollback of recent fuel relief. 

A Pakistani-brokered plan emerged from intense overnight contacts and proposes an immediate ceasefire, followed by negotiations on a broader settlement to be concluded within 15 to 20 days, Reuters reported, citing a source aware of the proposals.

Pakistan's army chief, Field Marshal Asim Munir, was in contact "all night long" with U.S. Vice President JD Vance, special envoy Steve Witkoff and Iranian Foreign Minister Abbas Araqchi, the source said.

Read This: PSX ranks third worst equity market worldwide amid Iran war, inflation: report

Over the past week, the PSX remained under pressure due to rising geopolitical tensions and elevated global oil prices. The benchmark KSE-100 Index showed continued volatility, falling by 1,309 points, or 0.9% week-on-week, to close at 150,398.70 points.

According to Topline Securities, the PSX ranked among the worst-performing markets globally in the March 2026 quarter, posting negative returns of 14.5% in rupee terms and 14.6% in dollar terms, placing it as the third worst-performing equity market worldwide. 

Data showed that Pakistan underperformed several regional and global peers, with only India and Indonesia recording steeper declines of 19.4% and 19.0%, respectively, in dollar terms during the quarter.

In a note, AKD Research forecasted that the Market sentiment will hinge on developments in the Middle East conflict. At the same time, upcoming corporate results are expected to remain in focus as the 3QFY26 earnings season approaches. 

Globally, oil prices dropped after a short climb, bonds fell and stocks ‌were mixed at the start of trading in Asia on Monday as U.S. President Donald Trump vowed “hell” if Tehran does not meet his deadline to reopen the Strait of Hormuz.

Trump’s repeated threats to destroy civilian infrastructure, including power plants and bridges, if the vital waterway is not open by ​Tuesday, have put traders on edge for reciprocal attacks by Iran on targets in the Gulf states.

With liquidity thin, ​as many countries around the region observed holidays on Monday, S&P 500 e-mini futures sank 0.2%, while ⁠MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.5%. The Nikkei 225 rose 1.2%, as South Korea’s Kospi advanced ​2%.

Oil ​prices fell more than $2 in choppy trade on Monday, as investors awaited clarity on the status of talks between the ‌U.S. and Iran and remained wary about sustained supply losses due to shipping disruptions.

Brent crude futures fell $1.92, or 1.76%, to $107.11 a barrel at 1037 GMT. U.S. West Texas Intermediate crude futures were trading down 1.82%, or $2.03, at $109.50 per barrel.