PSX tumbles over 6,700 points as geopolitical tensions intensify 

The Pakistan Stock Exchange (PSX) extended losses on Wednesday, with the benchmark KSE-100 plunging over 6,700 points as geopolitical tensions intensified after the United States launched airstrikes against Iran and reimposed crude sales sanctions.

According to the PSX website, the market opened on a bearish note, with the KSE-100 Index losing more than 2,000 points in the early minutes of trading. The index remained down for most of the session before coming under renewed selling pressure after 1:30 pm. 

By 2:15 pm, it was hovering at 179,542.10, down 6713.45 points, or 3.6%, from the previous close.

The selling pressure was broad-based, with losses across apparel, automobile assemblers, automobile parts and accessories, cable and electrical goods, chemicals, cement, commercial banks, fertiliser, oil marketing companies, power generation and refinery stocks. 

The decline followed US airstrikes against Iran and the reimposition of crude sales sanctions, which fuelled concerns over oil supply and inflation. Iran’s Revolutionary Guards said they had targeted US military sites in Bahrain and Kuwait after the US strikes. 

The sell-off followed Tuesday’s weaker close, when investors booked profits after the benchmark index moved near its all-time high during intraday trading. The KSE-100 Index closed at 186,255.55 points, down 1,199.14 points, or 0.64%.

Global markets also reflected the risk-off mood. Oil prices rose more than 3%, US Treasury yields moved higher, and the dollar strengthened to its highest level in a week. Investors also increased bets on a September Federal Reserve rate hike, adding pressure on emerging-market assets. 

Asian markets were volatile and swung to losses with investors rattled by the sight of Samsung Electronics shares sliding for a second straight session, despite the company flagging a staggering 19-fold rise in profit. Analysts and investors are concerned that memory chip demand may slow in the second half of the year.

Brent crude futures climbed 3.3%, the most in a day since late May, to $76.54 a barrel. While that was well shy of the peaks above $120 during the height of the fighting, it was enough to inject some fresh inflation risk into the bond market, particularly since months of conflict have drawn down global oil inventories.