Index drops 2.29% amid global risk-off sentiment, with heavy pressure across banking, energy and industrial sectors
The Pakistan Stock Exchange (PSX) came under severe selling pressure on Monday, tracking a broader global market decline as fears of rising inflation intensified amid a deepening global oil crisis.
The downturn was triggered by stalled US-Iran negotiations, which kept tensions high around the Strait of Hormuz and pushed international crude prices above $110.91 per barrel. Sentiment was further rattled after reports of an attack on a nuclear power facility in the United Arab Emirates, while US President Donald Trump was expected to review possible military options against Iran, adding to geopolitical uncertainty.
Free-fall continued throughout the trading session, with investors opting to exit risk assets amid concerns over inflationary pressures and potential disruptions to global energy supplies.
The benchmark KSE-100 index recorded an intraday high of 164,939.09 points and slipped sharply to a low of 161,613.51 points before finally settling at 161,805.02 points, down 3,791.05 points, or 2.29%.
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Heavy losses were witnessed across key sectors, including commercial banks, oil and gas exploration companies, cement, automobile assemblers, fertiliser, power generation and oil marketing companies, reflecting broad-based risk aversion in the market.
Analysts attributed the sharp decline to rising global risk premiums, fears of sustained high oil prices, and concerns that prolonged geopolitical tensions could further strain inflation and external sector stability in emerging markets such as Pakistan.
KTrade Securities equity trader Ahmed Sheraz wrote that the KSE-100 index closed at 161,805 points, down 3,791 points (-2.29%)day-on-day, as broad-based selling pressure dominated the session amid rising geopolitical and macro concerns.
The downside was largely driven by heavy selling in banks, exploration & production, cement, and other index-heavy sectors. Major laggards included Oil and Gas Development Company, Engro Holdings, Meezan Bank, Pakistan Petroleum, United Bank, Fauji Fertiliser, Hub Power, Lucky Cement, Habib Bank and Bank Al Habib, all of which remained under pressure throughout the day.
Investor sentiment weakened further after Donald Trump’s remarks regarding Iran heightened fears of escalating tensions in the Middle East. International oil prices opened sharply higher overnight and continued to hover around $110-111 per barrel during trading hours, raising concerns over Pakistan’s inflation outlook and external account stability.
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On the macro side, Pakistan posted a current account deficit of $324million for April, which also weighed on market confidence. With oil prices rising and inflation risks building up again, concerns are increasing over the future interest rate trajectory. Until clarity emerges on US-Iran negotiations and the Strait of Hormuz situation stabilises, the market is expected to remain volatile with a downside bias, Sheraz stated.
Cumulatively, trading volume dropped to 499.7million shares from Friday’s total of 625.4million. The value of traded shares stood at Rs19.4billion. Shares of 487 companies were traded. Of these, 66 rose, 383 declined and 38 remained unchanged. Dost Steels emerged as volume leader with trading in 40million shares, losing Rs0.67 to close at Rs5.12.
