PSX slumps amid fears of renewed Iran tensions after Trump remarks

KARACHI: The Pakistan Stock Exchange (PSX) suffered a massive bloodbath on Wednesday, with the benchmark KSE-100 index plummeting by over 6,700 points following US President Donald Trump’s sudden announcement that the interim understanding with Iran was “over”.

The aggressive rhetoric from Trump also sparked immediate panic across regional equities and global energy markets.

The KSE-100 index plummeted to 179,542 points during intra-day trade, shedding 6,713 points in a volatile session characterised by heavy institutional selling and margin calls as investors rushed to safe-haven assets.

“The market was completely caught off guard by the abrupt collapse of the fragile diplomatic understanding,” said a senior equity analyst at a leading Karachi brokerage house.

“The scale of the drop reflects systemic fears over supply chain disruptions, a fresh regional conflict, and its attendant impact on Pakistan’s import-heavy economy.”

Global Oil Markets Surge

The diplomatic breakdown sent shockwaves through energy corridors, triggering a massive 6 per cent spike in global oil benchmarks.

Brent crude futures jumped to $78.82 per barrel, while US West Texas Intermediate (WTI) rose sharply to settle at $74.96 per barrel.

Analysts warned that a sustained rally in oil prices could severely strain Pakistan’s external account balance and stoke domestic inflation, complicating fiscal targets recently set in the federal budget.

Trump Scuttles Diplomacy

The financial carnage followed a press briefing on the sidelines of the NATO leaders’ summit in Ankara.

Speaking alongside NATO Secretary General Mark Rutte, Trump declared he had no interest in negotiating a replacement agreement with Tehran, dealing a fatal blow to international mediation efforts.

“I don’t think there is an interim agreement with Iran anymore,” Trump told reporters. “I don’t want a deal with Iran.”

While noting that American negotiators were technically free to continue engagement, the US president made it clear he saw little value in pursuing further diplomacy.

Reaffirming Washington’s stance, he vowed that Tehran would never be permitted to acquire a nuclear weapon.

Trump said that the United States had completely eliminated Iran’s senior leadership and dismantled its core military infrastructure.

He further alleged that Iranian forces had launched targeted attacks against commercial and state aircraft belonging to Saudi Arabia and Qatar, while holding Tehran directly responsible for the deaths of thousands of US service members over the past decades.