PSX tumbles 1,590 points amid geopolitical, economic concerns

The Pakistan Stock Exchange (PSX) suffered another sharp selloff on Tuesday as fears surrounding Middle East tensions and economic risks deepened, wiping out 1,590 points from the benchmark KSE-100 Index by the end of trading.

According to the PSX website, the market opened in positive territory, with the index rising over 1,000 points to an intraday high of 171,571.55 points during early trading. However, the gains proved short-lived as selling emerged across the market, pulling the index into negative territory.

Broad-based selling was witnessed across major sectors, including apparel, automobile assemblers, automobile parts and accessories, cement, commercial banks, fertilizer, oil and gas exploration companies, oil and gas marketing companies, pharmaceuticals, power generation and distribution, real estate investment trusts, and refineries.

Selling pressure intensified during the second half of trading, dragging the KSE-100 Index to an intraday low of 168,823.31 points. By the close, the benchmark settled at 168,916.22 points, down 1,590.09 points or 0.93%.

The decline followed a subdued session on Monday, when persistent tensions between the United States and Iran weighed on investor sentiment and limited market participation.

On Monday, the benchmark index had closed at 170,506.31 points, down 609.51 points or 0.36%.

Meanwhile, the State of Pakistan, in its “Half-Year Report FY26”, released on Tuesday, said that Pakistan’s macroeconomic stability improved further during the first half of FY26 despite challenges arising from global trade uncertainty and domestic floods.

The central bank projected real GDP growth for FY26 near the lower end of its earlier forecast range of 3.75% to 4.75%.

The report also warned that the Middle East conflict posed significant risks to Pakistan’s macroeconomic outlook, saying supply chain disruptions could affect the inflation trajectory, external trade, remittance inflows and overall economic activity.

On the global front, oil gained for a third day ​on Tuesday, and the dollar rose as hopes faded for a deal to get ships moving through the Strait of ‌Hormuz, while a red-hot rally in chip stocks cooled and traders waited on U.S. inflation figures.

U.S. President Donald Trump said the month-old ceasefire with Iran was "on life support" after Tehran's response to a U.S. plan to end the war made clear the sides were far apart.

Brent crude futures were up almost 4% to about $108 ​a barrel.

In Europe, the STOXX 600, which is still only 4% below late February's record high, was down 0.6%, while U.S. ​stock futures for the S&P 500 and Nasdaq were down 0.4% and 0.9%, respectively.

The shine even came off the almost unstoppable KOSPI index in Seoul, which recoiled as it approached 8,000 points and dropped about 3.5%, ​pulling down other regional markets.

Markets are also keeping a watchful eye on Trump's visit to China, which begins on Wednesday, with expectations low for either progress on Iran or on the trade front.