Intense selling pressure was observed at the Pakistan Stock Exchange (PSX) over the risk of a long war in the Middle East, with the benchmark KSE-100 Index closing with a loss of nearly 4,900 points on Monday.
The benchmark index came under selling pressure right from the opening bell, reflecting weak sentiment.
Selling intensified through the morning session, pushing the index to its intra-day low of 144,656.97. However, the sharp fall also attracted some value hunters, allowing the market to stage a modest recovery from its lows.
The index rebounded marginally but failed to regain strong upward momentum as bearish sentiment continued to dominate despite the partial recovery.
At close, the benchmark index settled at 146,842.97, a loss of 4,864.54 points or 3.21%.
“The local bourse felt the heat today, as surging oil prices and escalating geopolitical tensions rattled investor confidence. Adding to the unease, investors grew wary over the government’s decision to keep fuel prices unchanged for a second consecutive week, raising concerns of fiscal strain,” Topline Securities said in its post-market report.
On the index front, heavyweights FFC, ENGROH, MEBL, LUCK, and UBL acted as key laggards, dragging the index down by 1,527 points, it added.
Meanwhile, Sana Tawfik, Head of Research at Arif Habib Limited, told media that the market might continue to behave that way until clarity on the geopolitical front was achieved.
“Once any positive development, such as a ceasefire, emerges, sentiment should improve, and stability will gradually return,” she maintained.
Behtari Capital said panic selling had intensified as the regional conflict shifted to a full-scale industrial war, targeting the economic heart of the Gulf.
“The focus remains on the Islamabad 4-nation meeting—any joint statement on a maritime corridor peace off-ramp is the only remaining catalyst for a recovery,” it said.
Pakistan said it was preparing to host “meaningful talks” to end the conflict over Iran in the coming days, even though Tehran earlier accused Washington of preparing a land assault as the US military sends more troops to the region.
During the previous week, PSX remained volatile and directionless as escalating regional tensions, sharp swings in international oil prices and tightening monetary conditions continued to weigh on investor sentiment, resulting in another weekly decline. The KSE-100 Index closed the previous week at 151,707.52 points, down 1,032.85 points or 0.7% week-on-week.
Internationally, stock markets slumped in Asia on Monday as investors dug in for a protracted Gulf conflict that already has oil prices heading for a record monthly rise, bringing a spike in inflation and the risk of recession to much of the globe.
The Financial Times on Sunday quoted President Donald Trump saying the US could seize Kharg Island in the Persian Gulf, from where Iran exports much of its oil, but also that a ceasefire could come quickly.
Yemen’s Iran-aligned Houthis also launched their first attacks on Israel since the start of the conflict.
The clampdown on the Strait has sent prices for oil, gas, fertilizer, plastic and aluminium surging, along with fuel for planes and shipping. Prices for food, pharmaceuticals and petrochemical products are all set to rise.
That is bad news for Asia, as much of the region is highly dependent on energy from the Middle East.
Japan’s Nikkei shed another 4.7%, bringing losses for March to almost 14%.
South Korea’s market fell 4.2%, while MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.2%.
S&P 500 futures lost 0.7%, while Nasdaq futures fell 0.9%.
For Europe, EUROSTOXX 50 futures and DAX futures both slid 1.5%, while FTSE futures fell 1.0%.
Meanwhile, the Pakistani rupee registered marginal gain against the US dollar in the inter-bank market on Monday. At close, the local currency settled at 279.16, a gain of Re0.01 against the greenback.
Volume on the all-share index increased to 529.13 million from 435.51 million recorded in the previous close.
The value of shares rose to Rs29.60 billion from Rs23.99 billion in the previous session.
K-Electric Ltd was the volume leader with 56.53 million shares, followed by B.O.PunjabXD with 35.92 million shares, and Dost Steels Ltd with 31.66 million shares.
Shares of 481 companies were traded on Monday, of which 51 registered an increase, 379 recorded a fall, and 51 remained unchanged.
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