KARACHI: Pakistan Stock Exchange (PSX) remained under pressure on Monday as escalating tensions in the Middle East triggered a sharp rise in global oil prices, raising concerns about Pakistan’s economic outlook ahead of the federal budget.
The benchmark KSE-100 Index recorded significant losses during intraday trading, falling as much as 2,046 points to 168,432.45. The market also touched a session high of 169,360.54, still down more than 1,100 points from the previous close of 170,478.94.
Market analysts attributed the downturn to fears that higher crude oil prices could widen Pakistan’s external financing gap, increase inflationary pressures, and complicate monetary policy decisions.
According to Ahsan Mehanti, Managing Director of Arif Habib Commodities, investor sentiment was hurt by the worsening security situation in the Middle East, uncertainty surrounding the upcoming budget, and expectations that rising oil prices could prompt tighter monetary conditions.
International oil markets rallied sharply after reports of fresh Israeli military action and explosions in several Iranian cities, including Tehran, Tabriz, and Isfahan. The developments dampened hopes of a near-term easing of regional tensions and raised concerns over potential disruptions to oil supplies through the Strait of Hormuz.
Brent crude climbed above $96 per barrel after gaining more than 3%, while US crude futures advanced to over $93 per barrel. The latest rise reversed losses recorded at the end of last week and extended a broader upward trend in oil prices seen since March.
Global equity markets also weakened. Major Asian indexes suffered steep declines, with South Korea’s KOSPI dropping around 5%, Japan’s Nikkei losing nearly 4%, and Taiwan’s benchmark index falling close to 4%. Investor concerns were amplified by a cautious outlook from technology companies and expectations that US interest rates could remain elevated for longer.
The selling pressure follows Friday’s decline at the PSX, when the KSE-100 Index lost nearly 697 points to close at 170,478.94. Market participants are expected to remain cautious as geopolitical risks and budget-related developments continue to shape investor sentiment.
