Stocks tumble at PSX, KSE-100 down 6,400 points amid US-Iran tensions
- Benchmark index was hovering at 179,792.17
Massive selling pressure was observed at the Pakistan Stock Exchange (PSX) after the US military launched airstrikes against Iran and reimposed crude sales sanctions, with the benchmark KSE-100 Index shedding over 6,400 points during the trading session on Wednesday.
Selling accelerated later in the session after US President Donald Trump said on Wednesday that the memorandum of understanding signed with Iran to end the conflict was “over”, adding he didn’t want to engage with Tehran.
At 2pm, the benchmark index was hovering at 179,792.17, down by 6,463.38 points or 3.47%.
Selling was observed in key sectors, including automobile assemblers, cement, commercial banks, fertiliser, OMCs and power generation. Index-heavy stocks, including HUBCO, MARI, OGDC, PSO, SSGC, SNGPL and WAFI, traded in the red.
On Tuesday, PSX closed lower as investors resorted to profit-taking after the benchmark KSE-100 Index hovered near its all-time high during intraday trade. Despite the correction, expectations of strong corporate earnings for the upcoming results season continued to underpin investor confidence and helped limit the extent of losses.
The benchmark KSE-100 Index settled at 186,255.55 points, down 1,199.14 points or 0.64%.
Internationally, the US military unleashed a new wave of strikes against Iran on Tuesday and revoked a licence allowing the country to sell oil after three tankers were hit by projectiles in the Strait of Hormuz, putting pressure on an already fragile ceasefire.
US oil prices jumped nearly 3% in early trade, extending the previous session’s gains, while the U.S. dollar clung to its highest levels of the week against most of its peers.
Markets have increased their bets for a September Federal Reserve rate hike to over 67% chance, up from about 57% on Tuesday, the CME FedWatch tool showed.
Investors also awaited minutes of the Federal Open Market Committee’s June 16-17 meeting, due later on Wednesday, for fresh clues on the interest rate path under new Fed Chair Kevin Warsh.
US consumers grew more concerned about near-term inflation pressures in June, a New York Fed report showed on Tuesday.
This is an intraday update
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