Stocks fell sharply in intraday trading on Monday, as renewed hostilities between the United States and Iran, worsening tensions in the Middle East and a jump in global oil prices triggered selling pressures on the Pakistan Stock Exchange (PSX).
The benchmark KSE-100 index hit an intraday low of 179,448.52, down 2,793.25 points, or 1.53%, from the previous close of 182,241.77. Its intraday high stood at 180,597.14, still down 1,644.63 points, or 0.90%.
“PSX fell more than 1% due to Iran escalation and worsening tensions in the Middle East,” said Ahsan Mehanti, MD and CEO of Arif Habib Commodities. geo.tv.
Mehanti said investor fears over inflation amid a rise in global crude oil prices and the potential impact on Pakistan’s external account played a catalytic role in the selling pressure.
Ismail Iqbal Securities also expected the market to remain under pressure as geopolitical tensions continued to rise along with rising oil prices.
“Sentiment is likely to remain sensitive to any new developments on the geopolitical and macroeconomic fronts,” the brokerage said.
“The market opened lower as renewed hostilities between the United States and Iran pushed up oil prices, prompting investors to take a cautious stance,” said Huzaifa Riaz, director at Mayari Securities (Pvt) Limited.
“Despite the prevailing geopolitical uncertainty, support emerged at lower levels in anticipation of resumptions of diplomatic negotiations once the escalation subsides,” he added.
Oil prices rose more than 4% on Monday after another flare-up between the United States and Iran threatened their already fragile truce.
The renewed hostilities followed last week’s exchange of fire and came as negotiators struggled to reach a lasting peace deal to keep the Strait of Hormuz open.
The US military launched a new wave of attacks on Sunday after renewed fighting over the waterway saw several of Washington’s Gulf allies targeted by enemy fire.
Both major oil contracts soared as much as 4.5%, stoking fresh concerns that inflation could force central banks to raise interest rates.
The fresh fighting followed an Iranian attack early Sunday on a commercial ship in the strait, with the crew forced to abandon it after it caught fire.
Iran’s Revolutionary Guard stated after the incident that “the Strait of Hormuz will be closed until further notice and until the end of US interventions in this region,” according to the state news agency. IRNA.
US Central Command, however, said on Day X that the strait was “open to all vessels attempting to transit legally.”
U.S. officials said about 20 ships had been escorted through the strait in the previous 24 hours, although ship tracking sites showed little moving traffic.
Monday’s decline reversed the previous session’s gains. The PSX closed higher on Friday as the KSE-100 index gained 982.10 points, or 0.54%, to settle at 182,241.78. The index hit an intraday high of 183,477.57 and a low of 181,880.55 during Friday’s session.
