Selling pressure was observed at the Pakistan Stock Exchange (PSX) as geopolitical situation in the region remains tense, with the benchmark KSE-100 Index shedding over 1,000 points during the opening minutes of trading on Thursday.
At 9:25am, the benchmark index was hovering at 154,812.88, down by 1,045.59 points or 0.67%.
Selling was observed in key sectors, including automobile assemblers, cement, commercial banks, fertilizer, oil and gas exploration companies, OMCs, power generation and refinery. Index-heavy stocks, including ARL, HUBCO, MARI, OGDC, PPL, MCB, MEBL and NBP, traded in the red.
In a key development, Pakistan and the International Monetary Fund (IMF) have made “considerable progress” in discussions on the third review of the country’s Extended Fund Facility (EFF) programme, IMF mission chief Iva Petrova said on Wednesday, adding that talks will continue in the coming days to assess further the impact of recent global developments on the economy.
On Wednesday, PSX ended the session on a negative note as investors remained cautious amid escalating geopolitical tensions in the Middle East and volatility in global energy markets. The KSE-100 Index closed at 155,858.48 points, down 318.64 points (0.20%).
Globally, shares fell in Asia on Thursday as oil prices jumped on reports that more ships had been struck in the Strait of Hormuz and in Iraqi waters, fuelling inflation and pushing borrowing costs higher worldwide.
US crude rose 7.5% to $93.80 a barrel, extending a rise of more than 4% overnight. Brent crude futures jumped 7.7% to $99.03 a barrel.
That was despite plans from the International Energy Agency to release 400 million barrels of oil from its reserves, the largest such move in its history.
The US said it would release 172 million barrels of oil from next week, as part of the IEA plan.
Two fuel tankers in Iraqi waters had been struck by explosive-laden Iranian boats, Iraqi security officials said early on Thursday, while an Iraqi official told state media that oil ports “have completely stopped operations.”
Iran had earlier stepped up attacks on merchant ships in the Strait of Hormuz, telling the world to get ready for oil at $200 a barrel. On Wednesday, three vessels were reported to have been hit in Gulf waters as Iran’s Revolutionary Guards said their forces had fired on ships in the Gulf that had disobeyed their orders.
US President Donald Trump on Wednesday declared the war on Iran has been won but he will stay in the fight to finish the job, throwing more uncertainty in the mix.
All of this was bad for shares.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.8%, while the Nikkei dropped 1.6% as Japan is a major importer of oil and gas.
Both S&P 500 futures and Nasdaq futures fell 0.8%. Over in Europe, EUROSTOXX 50 futures fell 0.6% and DAX futures slid 0.8%.
This is an intra-day update
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