Steep decline at PSX, KSE-100 sheds over 3.5% as US reimposes naval blockade on Iran

The Pakistan Stock Exchange (PSX) witnessed broad-based sell-off on Tuesday as tensions between the US and Iran escalated, with the benchmark KSE-100 Index remaining under heavy pressure and shedding over 3.5% during the trading session.

The market faced persistent selling across key sectors. The benchmark gradually trended downward throughout the day, with only short-lived recovery attempts around mid-day failing to gain traction.

Selling intensified in the final trading hours, dragging the index to an intra-day low of 173,349.41, just above the session’s lowest level.

At close, the benchmark index settled at 173,518.81, down by 6,408.23 points or 3.56%.

“The sharp sell-off was driven by heightened geopolitical tensions after the reported collapse of the interim peace arrangement between the US and Iran,” brokerage house Topline Securities said in its post-market report.

“Investor sentiment deteriorated following reports that the US reimposed a naval blockade and conducted airstrikes, while Iran responded by targeting additional oil tankers transiting the Strait of Hormuz. The escalation fuelled concerns over regional stability, potential disruptions to global oil supplies, and increased risk aversion across financial markets, prompting broad-based selling at the PSX.”

The largest negative contribution to the index came from UBL, ENGROH, FFC, LUCK, and MEBL, which collectively shaved 2,057 points off the benchmark index, Topline said.

On Monday, PSX started the week on a bearish note as escalating geopolitical tensions in the Middle East triggered widespread selling, dragging the benchmark KSE-100 Index below the 180,000-point mark amid heightened investor concerns over regional stability.

The benchmark KSE-100 Index declined by 2,314.73 points, or 1.27%, to close at 179,927.05 points.

Globally, stocks ​swung between gains and losses and oil hit a one-month high in early Asian trading on ‌Tuesday after President Donald Trump said the U.S. was reinstating its blockade of Iranian shipping in the Gulf and would collect a 20% fee on cargo traversing the Strait of Hormuz.

In a volatile start to the session, MSCI’s broadest index of Asia-Pacific shares outside Japan ​rose 0.4%, led by a 2.2% gain for Korean shares.

Japan’s Nikkei 225 was up 0.2%, while ​S&P 500 e-mini futures nudged 0.1% lower.

Brent crude futures climbed 2.6% to $85.50 a barrel, their ⁠highest since mid-June, as trading resumed in Asia.

Markets were also rattled by hawkish comments on Monday from Federal Reserve ​Governor Christopher Waller, who said the U.S. central bank may need to raise interest rates “in the near term” if ​coming data show inflation continuing well above the 2% target.

Overnight, stocks on Wall ​Street sold off and oil futures surged more than 9% as conflict between the United States and Iran re-ignited, once again ‌throttling the ⁠flow of goods through the Strait of Hormuz.

Fed funds futures are pricing in an implied 43.3% probability ​of a 25-basis-point hike at ​the U.S. central bank’s ⁠next two-day meeting on July 28-29, compared to a 34.2% chance on Friday, according to the CME Group’s FedWatch tool.

Meanwhile, the Pakistani rupee posted marginal gain against the US dollar in the inter-bank market on Tuesday. At close, the local currency settled at 278.01, a gain of Re0.01 against the greenback.

Volume on the all-share index increased to 912.61 million from 845.28 million recorded in the previous close.

The value of shares rose to Rs45.61 billion from Rs35.55 billion in the previous session.

Cnergyico PK was the volume leader with 84.54 million shares, followed by K-Electric Ltd with 43.53 million shares, and WorldCall Telecom with 43.31 million shares.

Shares of 498 companies were traded on Tuesday, of which 40 registered an increase, 439 recorded a fall, and 19 remained unchanged.