Pakistan stocks fall nearly 1,900 points amid Middle East tensions, rising oil prices

KARACHI: Pakistan stocks fell sharply on Tuesday, with the benchmark KSE-100 index losing nearly 1,900 points as prolonged tensions between the United States and Iran and rising oil prices weighed on investor sentiment.

The KSE-100 index was down 1,904.31 points, or 1.10 per cent, at 171,731.76 points by 1:39 p.m., compared with Monday’s close of 173,636.07, according to Pakistan Stock Exchange data.

The decline came a day after the index fell 1,692.74 points, or 0.97 per cent, amid concerns over escalating tensions in the Middle East and higher crude prices.

At the Pakistan Stock Exchange, selling pressure was broad-based, with major sectors including automobile assemblers, cement, commercial banks and oil marketing companies coming under pressure, according to market reports.

Awais Ashraf, director of research at AKD Securities, said the “prolongation of tensions” between the United States and Iran was weighing on investor sentiment.

“Moreover, the increase in oil prices is also adding to the pressure,” he said.

The decline in Pakistani equities followed a rise in global oil prices as escalating Middle East tensions raised concerns about disruptions to energy supplies.

Brent crude was trading near $97 a barrel on Tuesday, after rising for a third consecutive day, with markets concerned about the impact of the conflict on supplies from the Gulf.

For Pakistan, higher international oil prices pose risks to inflation, the external account and macroeconomic stability because the country relies heavily on imported energy. The concerns have added to pressure on equities as investors assess the potential economic impact of a prolonged regional conflict.

Despite the renewed pressure, Ashraf said Pakistan’s economic position was stronger than during previous external shocks.

“Robust macroeconomic indicators, along with recent tapping of the international Eurobond market provides cushion to policymakers in comparison to previous shocks,” he said.

The KSE-100 had started Tuesday from 173,636.07 points after falling nearly 1,700 points in the previous session. The index initially remained close to Monday’s levels but selling intensified as the session progressed.

The broader market also weakened. At around 2:08 p.m., PSX data showed 103 stocks advancing against 378 declines, while 88 remained unchanged. More than 532.9 million shares had changed hands, with trading value of about Rs19.66 billion.

The KSE-30 index was down about 1 per cent, while the All-Share Index fell 0.94 per cent at the same time, highlighting the broad nature of the selling.

Market participants have remained cautious since the escalation in US-Iran tensions, with investors closely monitoring developments around the Strait of Hormuz and their potential impact on global energy supplies.

Global equity markets were also under pressure on Tuesday, while oil prices moved higher on renewed concerns over Middle East supply disruptions.

The recent weakness in Pakistani equities follows a period of strong gains earlier in the year, leaving investors particularly sensitive to geopolitical shocks and movements in international crude prices.

Analysts have said Pakistan’s improving macroeconomic indicators and access to international capital markets could provide some protection against external shocks. However, a prolonged rise in oil prices could put renewed pressure on the country’s import bill, inflation and external financing requirements.

Investors will now focus on developments in the US-Iran conflict, movements in global crude prices and their potential implications for Pakistan’s macroeconomic outlook as the trading session progresses.