The Pakistan Stock Exchange (PSX) witnessed massive selling on Monday as the benchmark KSE-100 Index plunged nearly 10% amid escalating geopolitical tensions in the region.
Selling pressure gripped the PSX from the start of trading. By 9:22am, the benchmark index plunged to 152,991.15, down by 15,071.01 points or 8.97%.
Following the nearly 9% drop, trading activity at PSX was halted for one hour.
“All TRE Certificate Holders are hereby informed that due to a 5% decrease in the KSE-30 index from the previous trading day’s close of the same, a Market Halt has been triggered as per PSX Regulations, and all equity-based markets have been suspended accordingly,” read the notice.
Following the resumption of trading around 10:22am, strong recovery momentum emerged, pushing the index rapidly higher by over 6,000 points, hitting an intraday high of 159,328.59.
However, selling pressure intensified in the final hours of trading.
At close, the KSE-100 settled at 151,972.99, a decrease of 16,089.17 points or 9.57%.
“The sharp sell-off was driven by escalating geopolitical tensions globally, triggering widespread risk-off sentiment and heavy selling pressure across the board,” said Topline Securities.
This also marks KSE-100’s highest-ever one-day fall.
Heavyweight constituents, including Fauji Fertilizer Company, United Bank Limited, Engro Holdings Limited, Hub Power Company, and Meezan Bank Limited, exerted substantial downward pressure, collectively eroding 5,167 points from the benchmark index, added Topline Securities.
Analysts attributed the selling pressure to regional tensions, sparking fears of rising economic pressures on the country.
“Elevated oil prices are highly detrimental to Pakistan’s external account, and persistently high commodity prices are likely to trigger a new wave of inflation,” Waqas Ghani, Head of Research at JS Global, told media.
Across-the-board selling was observed in key sectors, including automobile assembler, cement, commercial banks, fertiliser, oil and gas exploration, OMCs, power generation and refinery. Index-heavy stocks, including HBL, MCB, MEBL, MARI, OGDC, POL, PPL, HUBCO, ARL, traded in the red.
During the previous week, Pakistan’s equity market remained under sustained pressure, as rising geopolitical tensions and domestic security concerns continued to weigh heavily on investor sentiment.
The benchmark KSE-100 Index at the PSX declined by 5,107.53 points, or 2.9% week-on-week, to close at 168,062.17 points.
Internationally, oil prices surged on Monday, and shares slid as military conflict in the Middle East looked set to last weeks, sending investors flocking to the relative safety of the dollar and gold.
Brent jumped 4.5% to $76.07 a barrel, though it had briefly topped $82.00 at one stage, while US crude climbed 3.9% to $69.59 per barrel.
Gold rose 1.0% to $5,327 an ounce.
Military strikes by the United States and Israel on Iran showed no sign of lessening, while Iran responded with missile barrages across the region, risking dragging its neighbours into the conflict.
President Donald Trump suggested to the Daily Mail that the conflict could last for four more weeks, while posting that attacks would continue until US objectives were met.
All eyes were on the Strait of Hormuz, where around a fifth of the world’s seaborne oil trade flows and 20% of its liquefied natural gas.
While the vital waterway has not yet been blocked, marine tracking sites showed tankers piling up on either side of the strait, wary of attack or maybe unable to get insurance for the voyage.
A prolonged spike in oil prices would risk reigniting inflationary pressures globally, while also acting as a tax on business and consumers that could dampen demand.
OPEC+ did agree on a modest oil output boost of 206,000 barrels per day for April on Sunday, but a lot of that product still has to get out of the Middle East by tanker.
Chinese blue-chips went their own way and held steady.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.2%.
Meanwhile, the Pakistani rupee registered a marginal gain against the US dollar in the inter-bank market on Monday. At close, the local currency settled at 279.46, a gain of Re0.01 against the greenback.
Volume on the all-share index jumped to 809.55 million from 536.24 million recorded in the previous close.
The value of shares increased to Rs48.51 billion from Rs25.54 billion in the previous session.
K-Electric Ltd. was the volume leader with 163.35 million shares, followed by WorldCall Telecom with 82.60 million shares, and F. Nat.Equities with 41.85 million shares.
Shares of 483 companies were traded on Monday, of which 21 registered an increase, 413 recorded a fall, and 49 remained unchanged.
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