KSE-100 Crashes Over 2,100 Points as Middle East Escalation Fears Rattle Investors

On Tuesday, the Pakistan Stock Exchange (PSX) experienced a severe downturn as the benchmark KSE-100 Index shed over 2,100 points intraday. Escalating geopolitical tensions in the Middle East triggered widespread apprehension regarding a prolonged and expanding regional conflict.

Market sentiment soured following Iran’s threats of retaliation against any fresh United States strikes on its assets. Compounding these fears, attacks on multiple energy facilities in Saudi Arabia stoked concerns of a broader escalation across the region.

Trading data from the PSX indicates that the market commenced the session in negative territory but initially managed to avert a steep decline. However, intense selling pressure emerged after midday, driving the KSE-100 to an intraday low of 171,490.63 points, representing a drop of approximately 2,145 points by 1:30 pm.

The sell-off was broad-based, impacting a wide array of sectors including apparel, automobile assemblers, automobile parts and accessories, cement, chemicals, exchange-traded funds, fertiliser, commercial banks, oil and gas exploration firms, and oil marketing companies.

This decline followed a lackluster session on Monday, during which broad-based selling across major sectors dampened market morale amid heightened investor caution.

The previous day, the benchmark KSE-100 Index contracted by 1,692.74 points, or 0.97%, to close at 173,636.08 points. Notably, commercial banks, oil and gas, and cement stocks bore the brunt of the selling pressure.

On a global scale, equities retreated and the Japanese yen strengthened on Tuesday. Attacks on energy infrastructure around the Gulf propelled Brent crude towards $100 a barrel, while copper prices surged to unprecedented highs.

European equities also faced downward pressure, with the STOXX 600 declining by 0.4%. In the United States, S&P 500 futures fell 0.3%, whereas Nasdaq futures edged up 0.1% ahead of Wall Street’s reopening after a long weekend.

Oil prices reached multi-week highs on Tuesday after Iran-backed Houthis targeted Saudi energy facilities, prompting Tehran to issue threats of “economic warfare” against the United States.

By 0800 GMT, Brent crude futures had advanced $2.00, or 2.06%, settling at $99.00 a barrel. Meanwhile, U.S. West Texas Intermediate crude was priced at $94.41 a barrel, an increase of $2.93, or 3.2%.

Earlier in the session, Brent crude peaked at $99.22 a barrel, marking its highest level since July 24. Similarly, WTI crude reached $94.60 a barrel, its highest since June 8.

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