Escalating regional tension took their toll on investor sentiment at the Pakistan Stock Exchange (PSX) as the benchmark KSE-100 index sustained further losses on Thursday.
During the opening few minutes of trading KSE-100 index plunged over 1,000 points. By the end of the trading session, the benchmark index had recovered some of its losses to settle at 63,202.40, still a decrease of 364.93 points or 0.57%.
Negativity was witnessed across-the-board with index-heavy sectors including cement, chemical, commercial banks, fertiliser, oil and gas exploration companies, OMCs and power generation trading in the red.
Selling pressure comes as tensions between neighbouring Pakistan and Iran rose to spook investors, said experts.
“Investors traded with caution due to the ongoing Pak-Iran conflict,” said Capital Stake in its report on Thursday.
“This morning Pakistan undertook a series of highly coordinated and specifically targeted precision military strikes against terrorist hideouts in Siestan-o-Baluchistan province of Iran,” the Ministry of Foreign Affairs (MOFA) said in a statement on Thursday morning.
“A number of terrorists were killed during the Intelligence-based operation – codenamed ‘Marg Bar Sarmachar’,” it added.
The development was Islamabad’s response after Iran conducted a strike inside Pakistani territory which Pakistan said resulted in the death of two innocent children and injured three girls.
“This violation of Pakistan’s sovereignty is completely unacceptable and can have serious consequences,” said the Ministry of Foreign Affairs in a statement early Wednesday morning.
The latest strikes add to multiple regional crises amid Israel’s aggression in Gaza and pro-Palestinian Houthis’ attacks on commercial vessels in the Red Sea.
Globally, Asian shares were off to a tepid start on Thursday, weighed down by a murky economic outlook in China and expectations the global rate easing cycle may not come as early as some had initially thought.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1%, though it was still languishing near Wednesday’s two-month low of 490.45 points.
The index had tumbled more than 2% on Wednesday, its steepest one-day percentage fall in more than five months, led by a slump in Chinese stocks after a slew of economic data pointed to a shaky economic recovery in China.
Meanwhile, the Pakistani rupee registered back-to-back gains against the US dollar, appreciating 0.04% in the inter-bank market on Thursday. As per the State Bank of Pakistan, the local unit closed at 279.98, a gain of Re0.12 against the greenback.
Volume on the all-share index inched up to 445.8 million from 421.3 million a session before.
The value of shares declined to Rs14.2 billion from Rs18.5 billion in the previous session.
K-Electric Ltd. was the volume leader with 59.7 million shares, followed by P.I.A.C.(A) with 40.4 million shares, and WorldCall Telecom at 35.3 million shares.
Shares of 345 companies were traded on Thursday, of which 96 registered an increase, 227 recorded a fall, while 22 remained unchanged.
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