Selling pressure at PSX as geopolitical tensions flare after Israeli strike on Iran

Selling pressure was observed at the Pakistan Stock Exchange (PSX) on Friday, as the benchmark KSE-100 Index closed the session nearly 2,000 points lower amid escalating geopolitical situation in the region after Israel conducted a military strike on Iran.

Selling pressure persisted throughout the trading session, dragging the KSE-100 to an intra-day low of 121,604.60.

At close, the benchmark index settled at 122,143.57, down by 1,949.56 points or 1.57%.

“The market reacted to heightened geopolitical tensions following last night’s Israeli strikes on various military and nuclear facilities inside Iran. The index opened in the red and quickly extended losses,” Ali Najib, Deputy Head of Trading, Arif Habib Limited said.

Heavyweight blue-chip stocks in the fertiliser, cement, banking, and technology sectors bore the brunt of the sell-off. ENGROH, LUCK, FFC, BAHL, and SYS collectively contributed a 505-point decline in the index, he added.

On Thursday, the PSX witnessed a modest correction, easing after a strong rally earlier in the week fueled by investor optimism surrounding the federal budget. The KSE-100 Index declined by 259.56 points, or 0.21%, closing at 124,093.12 points.

The benchmark index gained 0.4% week-on-week (WoW) basis.

“KSE 100 Index started the week on a positive note where the budget increased investor optimism as government kept the CGT [capital gain tax] and dividend rates unchanged and overall theme of the budget was of fiscal consolidation.

“However, market came under pressure by the end of the week on news of 50% tariff on steel by US on its trading partners and attack by Israel on Iran in which senior military personnel lost their lives resulting in increase in tension in Middle East,” Topline Securities said.

Globally, stocks dived in early Asian trade on Friday, led by a selloff in US futures, while oil prices jumped after Israel conducted a military strike on Iran, sending investors scurrying to safe havens such as gold and the Swiss franc.

The Israeli attack raises the risk of a fresh escalation in tensions in the Middle East, a major oil producing region, and comes at a time of heightened pressure on the global economy and financial markets from US President Donald Trump’s shakeup of trade policies.

Market reaction was swift, with U.S. S&P E-mini futures slumping 1.5% as of 0055 GMT and Nasdaq futures skidding 1.7%.

Japan’s Nikkei lost 1.4% and South Korea’s KOSPI slipped 1.2%.

Brent crude jumped more than 6% to $73.56 per barrel. Gold climbed 1% to about $3,419 per ounce.

Israel said it was declaring a state of emergency in anticipation of a missile and drone strike by Tehran, after what it called a “preemptive strike” over Iran’s nuclear programme.

Explosions were heard northeast of Iran’s capital Tehran early on Friday, the state-run Nour News said.

Two US officials who spoke on condition of anonymity said Israel had begun carrying out strikes on Iran and there was no US assistance or involvement in the operation.

Meanwhile, the Pakistani rupee weakened against the US dollar, depreciating 0.1% on Friday. At close, the local currency settled at 282.96, a loss of Re0.29 against the greenback.

Volume on the all-share index decreased to 968.35 million from 1,024.63 million recorded in the previous close.

The value of shares declined to Rs29.56 billion from Rs50.54 billion in the previous session.

Pervez Ahmed Co was the volume leader with 116.65 million shares, followed by WorldCall Telecom with 100.89 million shares, and Ist.Capital Sec with 85.32 million shares.

Shares of 469 companies were traded on Friday, of which 130 registered an increase, 304 recorded a fall, while 35 remained unchanged.