PSX plunges 1,900 points amid Middle East tensions

The Pakistan Stock Exchange’s benchmark KSE-100 index came under heavy pressure during intraday trading on Tuesday, falling nearly 1,900 points as escalating tensions in the Middle East and rising oil prices dampened investor sentiment.

The index dropped 1,904.31 points, or 1.10 per cent, to 171,731.76 points by 1:39pm, compared with the previous close of 173,636.07 points.

Market analysts attributed the decline largely to concerns over the prolonged tensions between the United States and Iran. Higher international oil prices have added further pressure on the market by raising concerns about the potential impact on Pakistan’s external account and inflation.

Awais Ashraf, director of research at AKD Securities, said the continuation of tensions between Washington and Tehran was weighing on investors. He also pointed to the sharp increase in oil prices as another factor contributing to the market’s weakness.

Despite the pressure, Ashraf said Pakistan’s relatively strong macroeconomic indicators and its recent access to the international Eurobond market could provide policymakers with greater room to manage external shocks.

Global oil markets have also reacted strongly to developments in the region. Recent attacks by the Houthis on Saudi energy facilities have heightened concerns about potential disruptions to regional oil supplies.

Brent crude futures were trading around $99 a barrel, while US West Texas Intermediate (WTI) crude stood above $94 a barrel during the day. Brent had earlier climbed to $99.22 per barrel, its highest level since July 24, while WTI reached $94.60, its highest since June 8.

The latest decline follows another weak session on Monday, when the KSE-100 index lost 1,692.74 points to close at around 173,636 points.