The Pakistan Stock Exchange (PSX) opened the week on a sharply negative note on Monday, as escalating tensions in the Middle East triggered a massive sell-off, sending the benchmark KSE-100 index to a steep decline.
Market Plunge and Trading Halt
Early trading saw the KSE-100 drop by 9,453 points (6%), settling at 148,042.88, down from Friday’s close of 157,496.10 points. The index reached an intraday low of 144,929.84 points, a fall of 12,375 points (7.98%), prompting the PSX to temporarily halt trading under its risk-management rules.
The halt was triggered after a 5% decrease in the KSE-30 Index, during which all outstanding orders were automatically cancelled. Trading resumed according to the exchange’s re-opening schedule:
- Market Halt: 09:22:15 am
- Pre-Open: 10:22:15 am
- Open: 10:27:15 am
Reasons Behind the Sell-Off
Analysts pointed to the US-Israel conflict with Iran as the primary driver of market volatility. AAH Soomro, independent investment analyst, noted:
“The pressure is obvious due to war premium and 100-plus oil prices derailing macro stability with no signs of ceasefire. All eyes on SBP today.”
Oil prices surged dramatically, with West Texas Intermediate (WTI) hitting $118.88 per barrel (up 30%) and Brent crude spiking 28% to $118.73, the highest levels since the Russian invasion of Ukraine in 2022. Investors feared that the conflict could last longer after US statements insisting on the “unconditional surrender” of Iran.
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Investor Sentiment and Outlook
Despite the sell-off, analysts see some potential for recovery, noting that the KSE-100 trades at a price-to-earnings ratio of 8.1 times and offers a dividend yield of 6.3%, which remains attractive historically.
AHL Research highlighted that the week’s market performance will depend heavily on geopolitical developments and the Monetary Policy Committee (MPC) meeting. Certain sectors are still considered fundamentally strong despite the ongoing volatility.
Regional Market Impact
Other Asian stock markets also declined sharply, reflecting global investor concern over oil supply disruptions and the continuing war. The rapid rise in crude prices and ongoing geopolitical uncertainty prompted investors to adopt a cautious stance.
In summary, the combination of Middle East tensions, rising oil prices, and inflation concerns has created one of the most dramatic early-week movements in the PSX in recent years, underscoring the market’s sensitivity to global geopolitical risks.
