Pakistan stocks plunge nearly 1,300 points amid US-Iran tensions

The Pakistan Stock Exchange (PSX) came under heavy selling pressure on Wednesday as renewed tensions between the United States and Iran unsettled investors and raised concerns over possible disruptions to global energy supplies.

The benchmark KSE-100 Index fell nearly 1,300 points in the opening minutes of trading.

By 10am, the index had dropped 1,273.65 points, or 0.72%, to 175,193.34.

Selling pressure was visible across several major sectors. Automobile assemblers, cement companies, commercial banks, oil and gas exploration firms, oil marketing companies and power producers remained under pressure.

Several index-heavy stocks also traded in negative territory. HUBCO, Mari Petroleum, Oil and Gas Development Company, Pakistan Petroleum Limited, Habib Bank, MCB Bank, Meezan Bank and National Bank of Pakistan were among the major stocks facing selling pressure.

The latest decline followed a weak session on Tuesday. Investors remained cautious as uncertainty surrounding the US-Iran conflict continued to influence market sentiment. Fluctuations in international oil prices also added to concerns.

The KSE-100 Index ended Tuesday’s session at 176,466.99 points, losing 508.69 points, or 0.29%.

The pressure on Pakistani equities came as international markets also moved lower. Asian stocks fell sharply on Wednesday after renewed US-Iran hostilities pushed oil prices higher and intensified concerns about inflation and interest rates.

Japan’s Nikkei 225 declined 2.6%, while South Korea’s KOSPI fell more than 3%. MSCI’s broadest index of Asia-Pacific shares outside Japan dropped around 1.5%.

US stock futures also remained under pressure. S&P 500 futures slipped 0.1% after Wall Street recorded losses in the previous session.

The S&P 500 fell 0.7% overnight, while the Nasdaq Composite declined 1%. Rising government bond yields added to pressure on US equities.

Investors are also closely monitoring expectations for US monetary policy. Recent economic data showed that American manufacturing activity slowed in August, although the sector remained in expansion territory.

Markets have increasingly priced in the possibility of a US interest-rate increase at the Federal Reserve’s upcoming meeting.

According to market expectations, the probability of a 25-basis-point rate hike at the Fed’s September 16 meeting has risen sharply compared with the previous week.