PSX falls over 600 points amid renewed Middle East tensions

The Pakistan Stock Exchange gave up part of last week’s sharp rally on Monday as renewed tensions in the Middle East triggered selling, pulling the benchmark KSE-100 Index down more than 600 points by the close.

According to the PSX website, the market opened in negative territory, with the KSE-100 Index plunging more than 1,500 points to 169,583.44 shortly after trading began. The benchmark later recovered part of its losses and traded between a low of 169,583.44 and a high of 171,304.10 during the session. 

Broad-based selling was witnessed across major sectors, particularly pharmaceuticals, cement, investment banks, oil and gas marketing companies, textile weaving, and power generation and distribution.

At close, the index settled at 170,506.31, down 609.51 points or 0.36% from the previous close.

Last week, the market witnessed bullish momentum, with the benchmark KSE-100 Index gaining 8,122 points, or 5.0% week-on-week, to close at 171,116 points on Friday, while average daily traded volume declined 9.7% week-on-week to 1.1 billion shares.

The dominant driver of sentiment was easing tensions between Iran and the United States, with both sides reportedly moving toward a short-term memorandum to halt the conflict, leading international oil prices to fall 18% week-on-week to 100.5.

However, optimism over easing tensions proved short-lived after US President Donald Trump said on Sunday that Iran’s response to a US peace proposal was “unacceptable,” renewing concerns over global energy supplies as the Strait of Hormuz remained largely closed.

The developments pushed oil prices sharply higher, with Brent crude futures rising $4.04, or 3.99%, to $105.33 per barrel by 0614 GMT, while US West Texas Intermediate crude gained $4.43, or 4.64%, to $99.85 per barrel.

The dollar also strengthened in Asian trading amid signs that negotiations between Washington and Tehran had stalled, while US stock futures traded unevenly. In Asia, gains in selected AI-related stocks helped lift markets in Seoul and mainland China despite broader geopolitical uncertainty.