KSE-100 sheds nearly 4% as US-Iran peace talks collapse

Massive selling pressure was observed at the Pakistan Stock Exchange (PSX) on Monday after the US and Iran failed to reach an agreement during their crucial talks in Islamabad, with the benchmark KSE-100 Index closing down 6,600 points or 3.95%.

The bears maintained their grip for most part of the day, taking the index to an intra-day low of 160,158.92.

At close, the benchmark index settled at 160,591.33, down by 6,600.04 points or 3.95%.

“The market landscape has shifted drastically this morning,” said Behtari Capital on Monday.

“We are currently witnessing a flight to safety. In this high-volatility environment, cash is king. Until there is more clarity on the actual impact of the US blockade tonight, avoid catching a falling knife.”

Topline Securities said the downturn was primarily driven by uncertainty surrounding the lack of progress in the US–Iran talks held in Islamabad, coupled with growing concerns over a potential blockade of the Strait of Hormuz.

“These developments pushed global oil prices higher, triggering broad-based panic selling across the market.”

Selling pressure was particularly concentrated in index-heavy stocks, with FFC, UBL, ENGROH, LUCK, and MEBL emerging as major laggards, collectively pulling the benchmark down by 2,414 points, Topline said.

US Vice President JD Vance said on Sunday that his negotiating team was leaving Pakistan after not reaching a deal with Iran after 21 hours of negotiations.

Vance cited shortcomings in the talks and said Iran had chosen not to accept American terms, including not to build nuclear weapons.

Meanwhile, Iran’s parliamentary speaker, Mohammad Baqer Qalibaf, said that no agreement was expected in a single round of negotiations with the United States, as he underscored a persistent trust deficit following the latest indirect talks facilitated by Pakistan.

During the previous week, the PS closed higher as improving investor sentiment, driven by optimism surrounding ongoing US–Iran talks, supported broad-based buying across key sectors. The benchmark KSE-100 Index gained 1,673.87 points or 1.01% to close at 167,191.38 points.

Globally, oil and the dollar jumped on Monday as the failure ‌of US-Iran talks to yield an agreement left a fragile ceasefire hanging in the balance and no end to a choke on Middle East energy exports.

S&P 500 futures dropped 1% in early trade. Benchmark Brent crude futures surged 8% to $103 a barrel. The euro fell ​about 0.5% to $1.1672.

Moves in Asian stock markets were broadly lower but relatively modest, with investors reluctant to ​make big bets as they waited for signs of some form of a negotiated end ⁠to a six-week conflict that has already pushed oil prices more than 30% higher.

Japan’s Nikkei fell 0.4%, South Korea’s ​KOSPI slumped 1.4% and the S&P/ASX 200 slipped 0.6%.

Marathon talks in Islamabad ended in stalemate and with the U.S. ​announcing a blockade of Iranian ports, seemingly aimed at stopping Iran exporting oil or levying tolls to transit the narrow Strait of Hormuz, the choke point of the Persian Gulf.

The Wall Street Journal reported Trump and his advisers were weighing limited strikes on Iran, though ​there were no immediate reports of attacks in early Asian trading to shatter a fragile U.S.-Iran ceasefire that has ​largely held since last week.

Meanwhile, the Pakistani rupee registered marginal gain against the US dollar in the inter-bank market on Monday. At close, the local currency settled at 279 against the greenback.

Volume on the all-share index decreased to 743.23 million from 875.54 million recorded in the previous close.

The value of shares dropped to Rs34.28 billion from Rs46.65 billion in the previous session.

WorldCall Telecom was the volume leader with 176.63 million shares, followed by Sui South Gas with 60.24 million shares, and B.O.Punjab with 50.05 million shares.

Shares of 483 companies were traded on Monday, of which 66 registered an increase, 377 recorded a fall, and 40 remained unchanged.