Selling grips PSX, KSE-100 tumbles nearly 5,000 points as US reimposes naval blockade on Iran
- Benchmark index was hovering at 174,942.03
The Pakistan Stock Exchange plunged over 3,600 points due to escalating US-Iran tensions, causing widespread selling across sectors. Global markets also reacted with volatile stocks and surging oil prices.
- Global market reactions to US-Iran tensions and oil price surge.
- Key sectors and index-heavy stocks impacted at PSX.
- Federal Reserve's potential interest rate hikes amid inflation concerns.
Massive selling pressure was observed at the Pakistan Stock Exchange (PSX) as tensions between the US and Iran escalated, with the benchmark KSE-100 Index shedding nearly 5,000 points during the trading session on Tuesday.
At 12:04pm, the benchmark index was hovering at 174,942.03, down by 4,985.01 points or 2.77%.
Across-the-board selling was observed in key sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration, OMCs and power generation. Index-heavy stocks, including MARI, OGDC, PPL, HUBCO, MCB, MEBL and UBL, traded in the red.
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.
This is an intraday update