PSX tumbles over 5,000 points amid US-Iran deadlock, rising oil prices

The Pakistan Stock Exchange (PSX) witnessed a sharp decline on Monday as investor sentiment weakened following the breakdown of talks between the United States and Iran. Heavy selling pressure dominated early trading, dragging the benchmark KSE-100 Index down by more than 5,300 points at the opening bell.

Although the market showed fluctuations throughout the session, losses remained significant. By mid-morning, the index was down around 4,567 points, reflecting a drop of nearly 2.7 per cent. Later in the day, the market managed to recover slightly, trimming losses to approximately 4,450 points. By 2 PM, the losses had deepened once again, with the index hovering around 161,938.15 points, 5253.22 lower than the opening level.

Analysts attributed the downturn to rising geopolitical uncertainty after Islamabad-hosted negotiations between Washington and Tehran failed to produce a concrete agreement. The lack of clarity over the next steps in diplomatic engagement unsettled market participants, prompting a risk-off approach.

Adding to the pressure, global oil prices surged sharply, crossing $104 per barrel after reports of escalating tensions in the region. The spike followed an announcement by former US President Donald Trump regarding a blockade of maritime routes linked to Iranian ports through the Strait of Hormuz, raising concerns over global energy supply disruptions.

Market experts note that the combination of stalled diplomacy and rising oil prices has heightened uncertainty, which is likely to keep the equity market volatile in the short term. However, there remains cautious optimism as both the US and Iran have signaled a willingness to continue dialogue and maintain a ceasefire framework.

Looking ahead, investors are expected to closely monitor the next round of negotiations, with countries such as Qatar and Switzerland reportedly offering to host future talks.