PSX sheds 3,400 points as US-Iran talks uncertainty sparks selling

Selling pressure returned to the Pakistan Stock Exchange (PSX) on Friday after talks planned between the United States and Iran in Switzerland were called off, with the benchmark KSE-100 Index shedding more than 3,400 points during intraday trading.

According to the PSX website, the market had opened on a positive note, and the KSE-100 gained over 700 points in the early trade to climb to the 182,185.87 level. 

But sentiment weakened after Switzerland ⁠said US talks with Iranian negotiators on a pact to end the Middle East conflict would not take place ​on Friday, as Vice President JD Vance dropped his travel plans, adding to uncertainty over the prospects for a ​lasting truce.

As of 2:37 pm, the market was hovering at 177,926.22, down by 3471.99 points or 1.91% from the previous close.

Selling was recorded across key sectors, including automobile assemblers, automobile parts & accessories, cement, chemical, commercial banks, food & personal care products, oil and gas exploration companies, oil marketing companies, power generation and refineries.

The decline came a day after the PSX extended its bullish run on lower international crude oil prices and optimism over a possible peace agreement between Iran and the United States. 

On Thursday, the KSE-100 Index gained 887.20 points, or 0.49%, to close at 181,398.22 points.

Global stocks also fell, and oil prices got a boost on Friday ​after U.S. and Iranian negotiators called off peace talks, while the risk of official Japanese intervention mounted as the yen traded ‌on the brink of a 40-year low.

The MSCI All-World ​index was down 0.14%, flipping into negative territory after U.S. Vice President JD Vance pulled out of a planned trip to meet Iranian negotiators ​in Switzerland on Friday.

European stocks, meanwhile, managed to stay in positive territory, kept afloat by drugmaker stocks Novo Nordisk, AstraZeneca ⁠and Novartis.

Brent crude steadied on Friday ‌but remained set for a more than 8% weekly decline as traders weighed fading U.S.-Iran truce prospects after talks were called off and Israel escalated attacks in Lebanon.

Brent crude futures were little changed at $79.78 a barrel by 0820 GMT. The front-month July contract ​for U.S. West Texas Intermediate crude, which expires on Monday, rose nearly $1 or 1.3% to $77.59 a barrel. ​The more actively traded WTI August contract was up 13 cents at $75.98 a barrel.