PSX: KSE-100 sheds over 2,500 points as situation remains tense in ME

Selling pressure was observed at the Pakistan Stock Exchange (PSX) after new Houthi strikes on Saudi Arabia and Iranian attacks on ships in the Gulf, with the benchmark KSE-100 Index losing nearly 1.5% on Monday.

The index initially came under selling pressure, falling sharply before staging a recovery during the morning session. It climbed to an intraday high of 170,437.72 points, nearly erasing the early losses. However, the recovery failed to sustain, with the index gradually losing ground through the rest of the session.

Selling pressure intensified after 2pm, pushing the index below the 169,000 level and toward the session low of 167,441.63 points around 3pm. The market staged a modest late-session rebound, but the recovery remained insufficient to offset the day’s losses.

At close, the benchmark index settled at 167,970.65, down 2,541.20 points or 1.49%.

“The local bourse was battered by aggressive selling today as investor confidence took a sharp hit following Oman’s announcement of the postponement of a scheduled meeting between Iran and Gulf countries concerning the Strait of Hormuz,” said Topline Securities in its post-market commentary.

The brokerage house noted that the delay in diplomatic talks renewed concerns over regional stability and the possibility of prolonged disruption along the Strait of Hormuz, a key global oil-transit route.

“Meanwhile, international oil prices surged following the delay news, raising concerns over global energy supplies, Pakistan’s import bill, inflation, and external account. The development further weighed on investor sentiment,” it said.

On the negative side, UBL, FFC, LUCK, OGDC, and MCB were among the major contributors to the index decline, collectively dragging the KSE-100 by approximately 930 points, Topline added.

In a key development, the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) kept the policy rate unchanged at 11.5%.

Renewed geopolitical tensions between Iran and the United States and the intensifying conflict in the Middle East kept investor sentiment under pressure during the last week.

Concerns over maritime security, global trade disruptions and a fresh surge in international oil prices pushed the benchmark KSE-100 Index of the PSX down 4,816.95 points, or 2.7% week-on-week, to 170,511.86 points by the weekend.

Internationally, share markets slid in Asia on Monday as supply concerns caused oil prices to spike anew, while investors braced for possible ​interest rate hikes in both the United States and Japan this week.

Brent climbed 3% as new strikes on Saudi Arabia ‌and on ships in the Gulf tested nerves, after an attack on a Saudi oil pipeline and an advance by Yemen’s Houthis threatened to worsen the wartime disruption to global energy supplies.

A meeting in Oman between Iran and Gulf Arab states, scheduled for Monday to discuss a deal on opening the Strait of Hormuz, was postponed.

With shipping through ​the strait and the Bab el-Mandeb under threat, analysts fear oil prices could stay elevated for a lengthy period, stoking inflation globally.

An ​uncomfortably hot US consumer price report on Friday led markets to price in an 86% chance the Federal Reserve will ⁠lift rates by 25 basis points on Wednesday, and move again by December.

It would be the first hike since mid-2023.

Brent futures were last up 2.6% at $107.36 a barrel, having gained almost 9% last week, ​while U.S. crude rose 2.4% to $102.48 a barrel.

Japan’s Nikkei fell 1.7%, while South Korea dropped 3.3%. MSCI’s broadest index of Asia-Pacific shares outside Japan ​slipped 0.8%.

In Europe, EUROSTOXX 50 futures lost 0.5%, while DAX futures fell 0.4% and FTSE futures dipped 0.1%. On Wall Street, S&P 500 futures lost 0.5%, while Nasdaq ‌futures fell ⁠1.1%.

Meanwhile, the Pakistani rupee extended its marginal gains against the US dollar in the interbank market on Monday. The local unit closed the day at 277.31, a gain of Re0.01 against the greenback.

Volume on the all-share index decreased to 570.47 million from 687.47 million recorded in the previous close.

The value of shares declined to Rs24.67 billion from Rs33.70 billion in the previous session.

Cnergyico PK was the volume leader with 97.17 million shares, followed by Waves Home (R) with 72.90 million shares, and Media Times Ltd with 52.84 million shares.

Shares of 492 companies were traded on Monday, of which 83 registered an increase, 373 recorded a fall, and 36 remained unchanged.