Selling pressure returned to the Pakistan Stock Exchange (PSX) after US President Donald Trump said the United States would continue to attack Iran, with the benchmark KSE-100 Index shedding over 3,500 points on Thursday.
The index witnessed a sharp drop from the opening minutes, indicating aggressive selling right from the start. This early plunge set the tone for the day, pushing the index close to an intraday low of 150,022.43.
Following the initial fall, the market showed brief bouts of recovery. However, these rebounds lacked strong momentum, and the index remained under pressure.
At close, the benchmark index settled at 152,011.26, down by 3,500.30 points or 2.25%.
“The euphoria of yesterday’s market halt has been completely wiped out,” said Behtari Capital, as the ‘ceasefire rally’ crashes into a harsh geopolitical reality.
It said that the market was reacting to a ‘triple threat’ of bad news, i.e., US-Iran escalation, a hike in oil prices, and a surge in CPI inflation.
“CPI inflation has climbed to 7.3%. The combination of high energy costs and rising inflation has shattered hopes for a near-term interest rate cut by the State Bank of Pakistan,” it said.
Selling was observed in key sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration companies, OMCs and power generation. Index-heavy stocks, including MARI, OGDC, POL, PPL, MCB, MEBL, NBP and UBL, traded in the red.
Topline Securities said the local bourse remained under pressure, tracking the negative momentum in global markets after remarks by Donald Trump on the ongoing Iran conflict dented investor sentiment.
“Escalating geopolitical tensions, coupled with a surge in oil prices, kept market participants on the back foot, reinforcing a cautious stance throughout the session,” it said.
On Wednesday, PSX staged a powerful rally with the benchmark KSE-100 Index surging past the key psychological barrier of 150,000 points as improving investor sentiment, driven by optimism over geopolitical de-escalation in the Middle East, sparked broad-based buying and enabled the market to regain its bullish momentum.
The KSE-100 Index closed at 155,511.57 points, registering a sharp gain of 6,768.25 points or 4.55%.
Internationally, stocks fell, the dollar firmed, and oil rose on Thursday after US President Donald Trump said Washington’s “core strategic objectives” in the Iran war were nearing completion but stopped short of providing a clear outline of when the conflict would end.
The prospect of an end to the month-long U.S.-Israeli war with Iran has lifted global stocks and knocked the dollar off its recent highs in the past two sessions after a brutal March, where soaring oil prices sent risk assets into a tailspin.
But Trump, in his prime-time speech, said the US will strike Iran “extremely hard” over the next two to three weeks and hit the country into the “Stone Ages.”
That sent stocks retreating, with U.S. stock futures down 0.67% while European futures were 0.1% lower.
MSCI’s broadest index of Asia-Pacific shares outside Japan slid 0.75%. Japan’s Nikkei reversed course to trade down 0.79% in volatile trading.
Analysts and investors were focusing on when and how the Strait of Hormuz, a major fuel shipment route, would reopen and ease the bottleneck in supply that has hit Asian economies hard.
Iran has repeatedly fired on Gulf countries, some home to US bases, and is using the Strait of Hormuz, which carries a fifth of global oil and liquefied natural gas, as leverage.
Meanwhile, the Pakistani rupee registered marginal gain against the US dollar in the inter-bank market on Thursday. At close, the local currency settled at 279.11, a gain of Re0.01, against the greenback.
Volume on the all-share index decreased to 352.27 million from 670.87 million recorded in the previous close.
The value of shares rose to Rs19.51 billion from Rs43.98 billion in the previous session.
K-Electric Ltd was the volume leader with 56.14 million shares, followed by WorldCall Telecom with 17.56 million shares, and B.O. PunjabXD with 16.95 million shares.
Shares of 481 companies were traded on Thursday, of which 99 registered an increase, 323 recorded a fall, and 59 remained unchanged.
American Dollar Exchange Rate