ISLAMABAD: On Monday, Pakistan’s primary stock index declined by 1.5 percent. A leading brokerage firm attributed the drop to the delayed negotiations between Gulf states and Iran regarding the Strait of Hormuz, coupled with escalating global oil prices, which reignited fears over the nation’s energy expenditures and external financial stability.
The KSE-100 index shed 2,541 points to finish at 167,970, having dipped as much as 3,070 points during intraday trading due to widespread sell-offs.
The downturn followed Oman’s decision to postpone a Monday meeting between Iran and Gulf states, which was intended to address potential arrangements for the Strait of Hormuz. This vital global energy corridor has already severely disrupted oil and gas markets amid the ongoing Middle East conflict, and Oman did not provide a rescheduled date for the discussions.
“Today, aggressive selling battered the local exchange as investor confidence suffered a sharp decline following Oman’s announcement regarding the postponement of the scheduled talks between Iran and Gulf countries concerning the Strait of Hormuz,” Topline stated in its daily market report.
“The postponement of diplomatic talks has revived anxieties regarding regional stability and the potential for extended disruptions along the Strait of Hormuz.”
Global oil prices also surged by over 3 percent on Monday, with Brent crude exceeding $108 per barrel. Markets reacted to renewed attacks on Saudi Arabian energy infrastructure and shipping, alongside the delay in Hormuz negotiations.
“The postponement news triggered a surge in international oil prices, sparking concerns over global energy supplies, Pakistan’s import expenditure, inflation, and its external account,” Topline added. “This development further dampened investor sentiment.”
As a nation heavily dependent on energy imports, increases in international oil and gas prices pose a significant threat to Pakistan’s balance of payments and domestic inflation. Official data indicates that petroleum crude and products were among the country’s largest imports in the final month of the previous fiscal year.
The Strait of Hormuz, linking the Gulf to the Arabian Sea, previously facilitated approximately 20 percent of global petroleum liquid consumption and over 20 percent of worldwide liquefied natural gas trade before the current conflict severely obstructed maritime flows through the waterway.
The losses on Monday were widespread, with United Bank Limited, Fauji Fertilizer Company, Lucky Cement, Oil and Gas Development Company, and MCB Bank collectively removing around 930 points from the benchmark index, according to Topline.
Trading activity also diminished compared to the previous session. Approximately 570 million shares were traded, with a total value of Rs24.6 billion ($88.6 million), down from 683 million shares worth Rs33.6 billion ($121 million) on Friday.
Cnergyico PK Limited recorded the highest trading volume, with approximately 97 million shares exchanged.
Monday’s decline wiped out the gains made on Friday, when the KSE-100 had advanced 0.98 percent to close at 170,512. That recovery had been driven by reports of the planned Gulf-Iran meeting, which had temporarily eased oil prices and boosted investor optimism.
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