Pakistan Stock Market Drops 3.6% Amid Escalation of US-Iran Conflict

ISLAMABAD: Pakistan’s benchmark stock index declined by 3.56 percent on Tuesday, marking its most significant single-day drop in months, as investors reacted to renewed hostilities between the United States and Iran and intensified concerns over potential disruptions in global oil supplies.

The KSE-100 Index closed 6,402 points lower at 173,519, following reports that an interim peace agreement between Washington and Tehran had collapsed. The United States carried out new airstrikes, while Iran targeted additional oil tankers navigating the Strait of Hormuz, heightening regional instability.

This escalation has rattled global financial markets, with investors assessing the risk of prolonged Gulf conflicts. The region accounts for roughly one-fifth of worldwide oil production. Pakistan, heavily reliant on energy imports, faces heightened vulnerability to rising oil prices, which could exacerbate inflation, widen its trade deficit, and strain external financial resources.

“Bloodbath session witnessed at the PSX today, with the KSE-100 Index plunging 3.56 percent,” brokerage Topline Securities noted in a market analysis.

The brokerage attributed the steep sell-off to intensified geopolitical tensions, citing U.S. reimposition of a naval blockade and airstrikes, alongside Iran’s targeting of oil tankers, which amplified fears of ongoing instability and triggered widespread selling across sectors.

Major contributors to the index’s decline included United Bank, Engro Holdings, Fauji Fertilizer, Lucky Cement, and Meezan Bank, which collectively erased over 2,000 points, according to the brokerage.

Despite the downturn, trading activity remained robust, with over 913 million shares changing hands and turnover reaching 45.6 billion Pakistani rupees ($160 million).

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