Heavy selling hits PSX, KSE-100 loses nearly 2,500 points on US-Iran talks fallout

The Pakistan Stock Exchange (PSX) endured a volatile session on Friday, with the KSE-100 Index shedding nearly 2,500 points amid aggressive selling after it was learned that talks planned for Friday between the ‌United States and Iran in Switzerland ​would not take place.

The market opened in positive territory and initially moved higher, touching an intra-day high of 182,185.87 points. However, the positive momentum was short-lived as selling emerged before noon, triggering a steep decline that erased all early gains.

The index then plunged to an intra-day low of 177,836.16 points, reflecting a swing of more than 4,300 points between the day’s high and low.

After hitting the day’s low, the market staged a partial recovery during the second-half of the trading session. However, renewed selling in the final hour trimmed gains.

At close, the benchmark index settled at 178,922.75 points, a decline of 2,475.46 points or 1.36%.

“KSE-100 Index traded in narrow range during the early hours of trade, however selling pressure was observed during second half of trading session on news that US and Iran have postponed planned negotiations in Switzerland on a permanent peace agreement and Iran’s nuclear programme after fighting escalated in southern Lebanon between Israel and Hezbollah,” brokerage house Topline Securities said in its post-market report.

Top negative contribution to the index came from UBL, FFC, ENGROH, PPL, OGDC, LUCK, HBL and SYS, as they weighed on the index by 1,273 points, Topline said.

US Vice President JD Vance pulled out of a planned trip to meet Iranian negotiators in Switzerland on Friday to begin complex talks on implementing the 14-point agreement, opens new tab ​struck between Tehran and Washington to end their war, opens new tab, a White House spokesperson said.

US officials said this week they would hold a formal signing ceremony for the US-Iran agreement ‌in Geneva, but Iran’s foreign ministry cast doubt on that, saying it was unnecessary after both countries’ presidents signed the agreement on Wednesday.

On Thursday, the PSX extended its bullish momentum as declining international crude oil prices and growing optimism surrounding a potential peace agreement between Iran and the United States continued to strengthen investor confidence, triggering broad-based buying across key sectors. The KSE-100 Index gained 887.20 points, or 0.49%, to close at 181,398.22 points.

The KSE-100 Index gained 3.8% week-on-week (WoW), primarily driven by improving investor sentiment following progress toward a US–Iran peace agreement, Topline said. “The easing of geopolitical tensions contributed to a decline in global oil prices, supporting the positive momentum in the market.”

Internationally, shares climbed to record highs in Japan and South Korea on Friday as peace in the Middle ​East, with the reopening of the Strait of Hormuz, pulled oil prices even lower and eased inflation fears.

The US dollar was ‌on a tear, hovering near a 13-month high on its major peers, after a hawkish turn from the Federal Reserve led markets to price in more than one rate hike this year. That dragged the yen to the weakest level in two years and intensified speculation that Japanese authorities might have to intervene soon and stem the currency’s slide.

Oil tankers have started sailing ​through the Strait of Hormuz after the United States lifted its blockade on Iran on Thursday as an interim deal to end the three-month ​war took effect. Brent crude futures dropped 1% on Friday to $79.03 a barrel, and were down 9.5% for the week.

Share ⁠markets have had a blockbuster week.

Japan’s Nikkei gained 0.8% to hit a new record for the fifth straight session, extending its weekly gain to 8.5%. ​South Korea jumped 3.1%, adding to its weekly rise of 15.3%.

Mainland China and Hong Kong’s stock markets are closed for the Dragon Boat Festival holiday. Taiwan ​was also on holiday.

Meanwhile, the Pakistani rupee posted marginal gain against the US dollar in the inter-bank market on Friday. At close, the local currency settled at 278.25, a gain of Re0.01 against the greenback.

Volume on the all-share index rose to 1,050.04 million from 1,241.70 million recorded in the previous close.

The value of shares decreased to Rs54.14 billion from Rs58.01 billion in the previous session.

Sui South Gas was the volume leader with 87.35 million shares, followed by Kohinoor Spinning with 80.62 million shares, and TPL Corp Ltd with 47.04 million shares.

Shares of 497 companies were traded on Friday, of which 141 registered an increase, 329 recorded a fall, and 27 remained unchanged.