KSE-100 Index sheds over 1,500 points as Middle East tensions weigh on sentiment

Selling pressure engulfed the Pakistan Stock Exchange (PSX) amid escalating geopolitical tensions as fresh Israeli strikes on Iran spooked investors, with the benchmark KSE-100 Index shedding over 1,500 points on Monday.

The KSE-100 came under selling pressure right from the start, falling sharply below the 168,500-point level.

However, investors quickly stepped in to capitalise and triggered a strong rebound that pushed the index towards the intra-day high of 169,360.54 points during the morning session.

Buying activity resurfaced again after mid-day when the index dipped to the intra-day low of 168,432.45 points. The index staged another recovery, gradually climbing through the afternoon session and narrowing some of its earlier losses.

At close, the benchmark index settled at 168,953.70, down by 1,525.24 points or 0.89%.

“The local bourse witnessed a choppy trading session today, mirroring weakness across international equity markets as escalating geopolitical tensions dampened investor sentiment,” brokerage house Topline Securities said in its post-market report.

“The negative momentum largely tracked global market trends amid heightened geopolitical uncertainty, driven by violations of the ceasefire and renewed attacks, which reignited concerns across financial markets and kept investor risk appetite subdued,” it added.

On the index contribution front, heavyweight stocks remained under pressure, with UBL, ENGROH, FFC, HBL, HUBC, and PPL collectively eroding approximately 561 points from the benchmark index, Topline said.

During the previous week, escalating tensions between the United States and Iran weighed heavily on investor sentiment during the outgoing week, pulling the PSX lower as concerns over regional stability and rising oil prices prompted cautious trading across most sectors. The KSE-100 Index declined by 2%, or 3,483.87 points, on a week-on-week basis to close at 170,478.94 points.

Internationally, Asian stocks plunged on Monday as investors rushed out of the hottest AI-linked ​shares on fears the bull run has gone too far, too fast and as fresh hostilities in Iran pushed ‌up oil prices.

The twin triggers for a rout that is highlighting a fragile market mood were last week’s disappointing outlook at chipmaker Broadcom and a surprisingly strong US jobs report on Friday that has traders pricing a rate hike this year.

Korea’s chip-heavy KOSPI, the world’s best-performing market this year, led losses ​in Asia with a 5% slide that has the benchmark down 13% from last week’s record high.

Japan’s Nikkei fell ​almost 4% with market darlings across the computer-chip production supply chain falling furthest, while Taiwan’s benchmark sank ⁠3.9%.

Nasdaq futures were attempting a recovery following a sharp selloff on Friday, and European futures fell 1%.

The Nasdaq dropped 4.2% on ​Friday.

In bonds, 2-year Treasury yields rose more than 11 basis points on Friday and were ​up 1.6 bps on Monday to 4.1782%.

The Middle East situation also remains delicate, and Brent crude futures were up about 3.5% to $96.45 a barrel on Monday after Israel said it struck military targets in western and central Iran.

Meanwhile, the Pakistani rupee appreciated against the US dollar in the inter-bank market on Monday. At close, the local currency settled at 278.40, a gain of Re0.01 against the greenback.

Volume on the all-share index decreased to 657.97 million from 727.17 million recorded in the previous close.

The value of shares declined to Rs22.59 billion from Rs26.75 billion in the previous session.

TPL Properties was the volume leader with 60.58 million shares, followed by TPL Corp Ltd with 43.79 million shares, and Pace (Pak) Ltd with 26.34 million shares.

Shares of 494 companies were traded on Monday, of which 116 registered an increase, 336 recorded a fall, and 42 remained unchanged.