PSX tumbles over 400 points as US-Iran tensions rattle investors

Selling was witnessed across several major sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration companies, oil marketing companies and power

KARACHI: The Pakistan Stock Exchange (PSX) came under renewed selling pressure on Monday as escalating tensions between the United States and Iran unsettled investors, sending the benchmark KSE-100 Index down more than 400 points during early trading.

At around 9:40am, the KSE-100 Index stood at 177,242.03 points, registering a decline of 454.47 points, or 0.26%, from the previous close.

Selling was witnessed across several major sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration companies, oil marketing companies and power generation firms. Several heavyweight stocks, including HBL, MCB, MEBL, MARI, OGDC, PPL, PSO and HUBCO, were trading in negative territory.

The market had remained largely range-bound during the previous week. The KSE-100 gained around 530 points, or 0.3%, to close at 177,696.52 points, as uncertainty surrounding the US-Iran standoff and prospects for reopening the Strait of Hormuz kept investors cautious.

The latest pressure on Pakistani equities came amid a broader sell-off across Asian markets following renewed military confrontation between Washington and Tehran. Rising geopolitical risks pushed crude prices higher, while elevated bond yields added to concerns over global monetary policy.

International oil prices also moved upward, with Brent crude futures rising 1.4% to $89.38 per barrel after US forces reportedly struck two Iranian launchers on Larak Island on Sunday.

The renewed geopolitical uncertainty has also altered expectations regarding US interest rates. Market pricing showed a higher probability of a September rate increase, with investors closely watching upcoming US employment and inflation data for indications about the Federal Reserve’s next move.

Economists are expecting a recovery of about 58,000 jobs in the August payroll report after an unexpected decline of 23,000 jobs in July, while the unemployment rate is forecast to remain around 4.1%. A significantly weaker employment reading could reduce expectations of an early rate hike.

The combination of higher yields and heightened geopolitical tensions weighed heavily on Asian equities. Japan’s Nikkei fell around 2.1%, while South Korean stocks declined 2.4%. MSCI’s broadest index of Asia-Pacific shares outside Japan also dropped about 0.7%.

Investors at the PSX are now closely monitoring developments in the Middle East, movements in global oil prices and international interest-rate expectations, all of which could influence market sentiment in the coming sessions.