ISLAMABAD: Pakistan’s benchmark stock index fell 3.56 percent on Tuesday, its steepest one-day decline in months, as investors reacted to renewed fighting between the United States and Iran and growing concerns over disruptions to global oil supplies.
The benchmark KSE-100 Index closed down 6,402 points at 173,519 after reports that an interim peace arrangement between Washington and Tehran had collapsed, with the United States carrying out fresh airstrikes and Iran targeting additional oil tankers transiting the Strait of Hormuz.
The sharp escalation has unsettled financial markets globally as investors weigh the risk of prolonged conflict in the Gulf, a region that supplies about a fifth of the world’s oil. Pakistan, which imports much of its energy, is particularly vulnerable to sustained increases in global oil prices, which can fuel inflation, widen the trade deficit and increase pressure on its external finances.
“Bloodbath session witnessed at the PSX today, with the KSE-100 Index plunging 3.56 percent,” brokerage Topline Securities said in a market note.
“The sharp sell-off was driven by heightened geopolitical tensions after the reported collapse of the interim peace arrangement between the US and Iran.”
The brokerage said investor sentiment deteriorated after reports that the United States had reimposed a naval blockade and launched airstrikes, while Iran responded by targeting additional oil tankers in the Strait of Hormuz, increasing concerns over regional stability and prompting broad-based selling.
The biggest drag on the benchmark index came from United Bank, Engro Holdings, Fauji Fertilizer, Lucky Cement and Meezan Bank, which together erased more than 2,000 points from the market, according to the brokerage.
Despite the sell-off, trading activity remained strong, with more than 913 million shares changing hands and turnover reaching 45.6 billion Pakistani rupees ($160 million).
