KARACHI: The Pakistan Stock Exchange (PSX) extended its losses on Tuesday, with investors continuing to offload shares amid rising global oil prices and heightened geopolitical tensions in the Middle East. The uncertainty surrounding energy supplies and regional security weighed heavily on market sentiment, pushing the benchmark index deeper into negative territory.
During intraday trading, the KSE-100 Index fell to 174,615.03 points, down 5,312.01 points, or 2.95%, from Monday’s closing level of 179,927.04. The market later recovered some ground, reaching an intraday high of 178,112.04, but it still remained 1,815 points (1.01%) below the previous close.
Oil Price Surge Triggers Market Sell-Off
Market analysts said the sharp increase in international crude oil prices was one of the main reasons behind the decline in equities.
Speaking to Geo.tv, Ahfaz Mustafa, Chief Executive Officer of Ismail Iqbal Securities, said investors were reacting to the latest developments in the Middle East and the resulting jump in oil prices.
He added that the upcoming corporate earnings season would likely play an important role in determining the market’s direction over the coming weeks.
Pakistan, being a net importer of petroleum products, is particularly vulnerable to sustained increases in global oil prices. Higher energy costs can widen the country’s import bill, place pressure on foreign exchange reserves, and contribute to inflation, all of which influence investor confidence.
Crude Oil Climbs to Four-Week High
International oil prices continued their upward trend on Tuesday as concerns over potential disruptions to energy supplies intensified.
Brent crude rose to around $84.80 per barrel, while US West Texas Intermediate (WTI) climbed to approximately $79.84 per barrel.
Although prices eased slightly after earlier gains, Brent crude had already recorded a 9.6% surge in the previous trading session, marking its biggest single-day increase since May 2020.
The rally followed renewed military tensions involving the United States and Iran, which have raised concerns over shipping through the Strait of Hormuz, one of the world’s most important oil transit routes.
Middle East Conflict Adds to Uncertainty
Investor sentiment remained fragile as reports indicated continued military exchanges between the United States and Iran.
According to international reports, the US carried out another round of strikes against Iranian targets, while additional measures affecting maritime traffic in the Strait of Hormuz heightened concerns over global energy flows.
The situation became more alarming after reports that two United Arab Emirates oil tankers were struck by missiles in Omani territorial waters. The incident reportedly resulted in the death of one Indian crew member and injuries to several others.
Shipping data also showed that tanker traffic through the Strait of Hormuz had fallen to its lowest level in nearly two months, adding to worries about possible disruptions in global oil supplies.
PSX tumbles as Middle East tensions and rising oil prices dampen investor confidence
Global Markets Also Under Pressure
The weakness was not limited to Pakistan, as stock markets across Asia also traded lower.
The MSCI Asia-Pacific Index (excluding Japan) declined 1.7%, while Japan’s Nikkei 225 fell 0.8%. US stock futures also pointed to a weaker opening after Wall Street ended the previous session in negative territory.
On Monday, the S&P 500 closed 0.8% lower, while the Nasdaq Composite dropped 1.6%, reflecting investor concerns over rising energy prices and geopolitical risks.
Investors Await Key Economic Indicators
Market participants are also closely watching upcoming economic developments, particularly US inflation data, which is expected to provide fresh clues about the future direction of monetary policy.
Recent comments from US Federal Reserve Governor Christopher Waller suggesting that interest rates may need to rise further if inflation remains elevated have also contributed to cautious investor sentiment in global financial markets.
Pressure Continues After Monday’s Decline
Tuesday’s losses followed another weak session on Monday, when the KSE-100 Index dropped 2,314.73 points, or 1.27%, to close at 179,927.04.
Analysts believe market direction in the coming days will largely depend on developments in the Middle East, movements in international oil prices, corporate earnings announcements, and broader global economic indicators. Until greater clarity emerges, investors are expected to remain cautious amid heightened geopolitical and economic uncertainty.
