PSX slumps nearly 4% as US–Iran talks fail to yield a deal

Pakistan’s equity market came under heavy selling pressure on Monday, with the benchmark KSE-100 Index dropping nearly 4% as the talks between the United States and Iran ended on Sunday without an agreement, while reports of a US naval blockade targeting Iranian ports, including the Strait of Hormuz, pushed global oil prices up around 8%.

According to the PSX website, the market opened on a bearish note and the KSE-100 plunged to as low as 161,638.07 in the opening minutes of trade, declining by 5,553.3 points or 3.3%. As the session progressed, the benchmark index extended losses and closed at 160,591.33, shedding 6,600.04 points or 3.95% from the previous close. 

Broad-based selling was recorded across major sectors, including automobile, cement, commercial banks, oil and gas exploration, oil marketing companies, power generation, and refinery. Index-heavy stocks such as ARL, HUBCO, MARI, OGDC, POL, PPL, PSO, SSGC, SNGPL and WAFI traded lower.

The previous week had seen the PSX close higher, supported by optimism around the Islamabad Talks, with the KSE-100 Index gaining 1,673.87 points, or 1.01%, to settle at 167,191.38.

President Donald Trump said on Sunday that U.S. forces would also intercept every vessel in international waters that had paid ​a toll to Iran. At the same time, the U.S. Central Command said that the U.S. blockade, starting ​at 10 a.m. ET on Monday (1400 GMT), would be "enforced impartially against vessels of all nations entering or departing Iranian ports and coastal areas, including all Iranian ports on the Arabian Gulf ​and Gulf of Oman."

Global markets also reacted to the outcome of the talks. Oil prices rose sharply, with Brent crude increasing by 8% to $103 per barrel, while the US dollar strengthened and the euro declined around 0.5% to $1.1672. S&P 500 futures dropped 1% in early trade.

Asian equity markets recorded declines, with Japan’s Nikkei down 0.4%, South Korea’s KOSPI falling 1.4%, and Australia’s S&P/ASX 200 slipping 0.6%, as investors remained cautious amid ongoing geopolitical uncertainty.