KSE-100 Index loses over 1,692 points to touch intraday low of 173,636.07 amid widespread sectoral decline
Bearish sentiment prevailed at the Pakistan Stock Exchange (PSX) on Monday as escalating US-Iran tensions cast a shadow over investor confidence, with reciprocal strikes targeting vessels in and around the Strait of Hormuz raising fears of sustained disruption to Middle Eastern energy supplies.
According to PSX data, the benchmark KSE-100 Index commenced trading under pressure, declining as much as 858 points during early proceedings. The selling pressure intensified in the latter half of the session, dragging the index to an intraday low of 173,603.75.
The downward momentum was evident across major sectors, with energy stocks bearing the brunt of the selloff. Automobile manufacturers, auto component suppliers, cement producers, commercial lenders, oil and gas exploration and marketing firms, pharmaceutical companies, power generators, refineries, and cable and electrical goods producers predominantly ended the session in negative territory.
At the closing bell, the KSE-100 settled at 173,636.07, representing a decline of 1,692.75 points, or 0.97%, from the prior close of 175,328.82.
Monday’s decline follows a challenging week for equity markets, with geopolitical uncertainties continuing to dampen sentiment. The benchmark index shed 2,368 points, or 1.3%, over the course of the week, closing at 175,329 on Friday.
Despite the near-term headwinds, three leading brokerage houses anticipate a recovery in Pakistan’s equity market, citing improving macroeconomic fundamentals, corporate earnings trajectory, and the impending IMF review as positive catalysts. However, they identify ongoing geopolitical uncertainty surrounding the US-Iran conflict as the primary near-term risk factor.
Globally, Asian technology shares advanced on Monday as a stronger-than-expected US employment report was interpreted as supportive for global growth, even as it reduced expectations for interest rate increases, while crude oil prices firmed following attacks on vessels in the Gulf by the US and Iran.
Tehran announced plans to declare a restricted maritime zone outside the Strait of Hormuz in the coming days, after US forces struck three Iranian tankers and Iran’s Islamic Revolutionary Guard Corps launched ballistic missiles at two US Navy vessels.
Across Asia, technology-driven optimism propelled Japan’s Nikkei 2.0% higher, recovering from similar losses recorded the previous week, while South Korea surged 4.3%.
Chinese blue-chip stocks advanced 0.2%, finding some respite as China’s finance ministry spearheaded a combined $54 billion capital injection into state-owned insurers and banks.
MSCI’s broadest index of Asia-Pacific shares excluding Japan climbed 1.5%.
The prospect of hawkish guidance from the European Central Bank following its rate decision is expected to maintain caution among European equities on Monday. EUROSTOXX 50 futures, DAX futures, and FTSE futures all edged down 0.1%.
On Wall Street, a US market holiday resulted in subdued trading volumes, with S&P 500 futures marginally down 0.1% and Nasdaq futures slightly up 0.1%.
Brent crude futures rose $1.20, or 1.25%, to $97.48 per barrel as of 0727 GMT, while US West Texas Intermediate crude stood at $92.62 per barrel, gaining $1.14, or 1.25%.
Brent advanced 7.8% last week while WTI gained nearly 10% following the resumption of US and Iranian attacks that curtailed oil flows through the Strait of Hormuz, a critical chokepoint through which approximately one-fifth of the world’s oil supply traditionally transits.