Steep decline at PSX, KSE-100 sheds over 3.5% as US reimposes naval blockade on Iran

The Pakistan Stock Exchange (PSX) witnessed a broad-based sell-off on Tuesday as tensions between the US and Iran escalated, with the benchmark KSE-100 Index remaining under heavy pressure, shedding over 3.5% during the trading session.

The market opened sharply lower and briefly touched an intraday high of 178,112.04 before persistent selling across key sectors erased early gains. The benchmark gradually trended downward throughout the day, with only short-lived recovery attempts around midday failing to gain traction.

Selling intensified in the final trading hours, dragging the index to an intraday low of 173,349.41, just above the session’s lowest level.

At close, the benchmark index settled at 173,518.81, down by 6,408.23 points or 3.56%.

On Monday, PSX started the week on a bearish note as escalating geopolitical tensions in the Middle East triggered widespread selling, dragging the benchmark KSE-100 Index below the 180,000-point mark amid heightened investor concerns over regional stability.

The benchmark KSE-100 Index declined by 2,314.73 points, or 1.27%, to close at 179,927.05 points.

Globally, stocks ​swung between gains and losses and oil hit a one-month high in early Asian trading on ‌Tuesday after President Donald Trump said the U.S. was reinstating its blockade of Iranian shipping in the Gulf and would collect a 20% fee on cargo traversing the Strait of Hormuz.

In a volatile start to the session, MSCI’s broadest index of Asia-Pacific shares outside Japan ​rose 0.4%, led by a 2.2% gain for Korean shares.

Japan’s Nikkei 225 was up 0.2%, while ​S&P 500 e-mini futures nudged 0.1% lower.

Brent crude futures climbed 2.6% to $85.50 a barrel, their ⁠highest since mid-June, as trading resumed in Asia.

Markets were also rattled by hawkish comments on Monday from Federal Reserve ​Governor Christopher Waller, who said the U.S. central bank may need to raise interest rates “in the near term” if ​coming data show inflation continuing well above the 2% target.

Overnight, stocks on Wall ​Street sold off and oil futures surged more than 9% as conflict between the United States and Iran re-ignited, once again ‌throttling the ⁠flow of goods through the Strait of Hormuz.

Fed funds futures are pricing in an implied 43.3% probability ​of a 25-basis-point hike at ​the U.S. central bank’s ⁠next two-day meeting on July 28-29, compared to a 34.2% chance on Friday, according to the CME Group’s FedWatch tool.