The stock market came under selling pressure on Monday as renewed escalation in the Middle East pushed up crude oil prices, fueling concerns over Pakistan’s external account, interest rate outlook and pre-budget uncertainty.
During the session, the Pakistan Stock Exchange’s KSE-100 benchmark index hit an intraday high of 169,360.54, down 1,118.4 points, or 0.66%, and a low of 168,432.45, reflecting a fall of 2,046.49 points, or 1.2%, from the previous close of 170,478.94.
“The PSX fell more than 1% due to Iran’s escalation and worsening tensions in the Middle East,” said Ahsan Mehanti, MD and CEO of Arif Habib Commodities.
“Pre-Budget uncertainty and investor expectations of a rise in global crude oil prices impact the external account, and a possible increase in interest rates played a catalytic role in selling pressure on PSX,” he added.
Brent oil prices rose more than $3 a barrel on Monday, initially spooked by Israel launching new attacks on Lebanon a day earlier, before gaining more strength after sounds of explosions were heard in Iran.
Local media reported sounds of explosions in Tehran, Tabriz and Isfahan early on Monday, eroding hopes of an imminent end to the overall war and a restart of crude oil flows through the Strait of Hormuz.
Brent crude futures rose $3.20, or 3.39%, to $96.24 a barrel, while U.S. crude futures rose $2.87, or 3.17%, to $93.41 a barrel by 0333 GMT.
The gains erased losses from Friday, when prices fell on hopes of an easing of the conflict between the United States and Iran, which has sent oil prices up more than 50% since March.
Iran fired a salvo of missiles at Israeli targets in retaliation on Sunday, although US President Donald Trump insisted a deal to end the wider war remained within reach.
Trump also reportedly told Israeli Prime Minister Benjamin Netanyahu to refrain from further attacks, telling the Financial times: “It will not have any impact on the agreement.”
Asian stocks also plunged on Monday as investors dumped AI-linked stocks amid concerns that the bull run had moved too far too fast, while fresh hostilities in Iran sent oil prices soaring.
South Korea’s KOSPI led regional losses with a 5% drop, while Japan’s Nikkei fell nearly 4% and Taiwan’s benchmark sank 3.9%.
The regional sell-off followed chipmaker Broadcom’s disappointing outlook last week and a better-than-expected U.S. jobs report, which led traders to price in the possibility of a rate hike this year.
In the previous session, the KSE-100 index closed lower, losing 696.57 points, or 0.41%, to settle at 170,478.94 against the previous close of 171,175.51.
The index hit an intraday high of 172,102.91 and a low of 170,254.65 during Friday’s session.
