PSX: KSE-100 Index falls 721 points amid US-Iran conflict

Selling pressure engulfed the Pakistan Stock Exchange (PSX) amid escalating tensions in the Middle East, pushing the benchmark KSE-100 closed lower by 721 points on Monday.

The benchmark index initially came under pressure but recovered steadily during the morning session, climbing towards 178,000 around noon.

However, selling pressure emerged after mid-day, triggering a gradual decline through the afternoon. The downward trend intensified towards the close, with the index falling to an intra-day low of 176,944.91.

At close, the benchmark index settled at 176,975.67 points, down 720.83 points or 0.41%.

“Concerns over potential disruptions to oil supplies through the Strait of Hormuz pushed Brent crude above $90/bbl, weighing on market sentiment,” brokerage house Topline Securities said in its post-market report.

Top negative contribution to the index came from UBL, SYS, HBL, LUCK and PPL, as they cumulatively weighed down on the index by 755 points, it added.

The KSE-100 Index closed marginally up 0.5% month-on-month in August, “reflecting a lack of fresh triggers and limited progress toward US-Iran peace negotiations,” Topline said.

During the previous week, PSX remained range-bound with the KSE-100 Index gaining 530 points, or 0.3%, as the continued US-Iran deadlock and uncertainty over efforts to reopen the Strait of Hormuz kept investor sentiment cautious. The KSE-100 closed the week at 177,696.52 points.

Internationally, share markets slipped on Monday in Asia as fresh fighting broke ​out between the United States and Iran, lifting oil prices, while bond yields stayed elevated after investors narrowed the odds ‌on a US rate hike.

Brent futures climbed 1.4% to $89.38 a barrel after US forces struck two of Iran’s launchers on its island of Larak on Sunday.

Markets reacted by lifting the probability of a September rate increase to 57%, shoving ​short-term Treasury yields sharply higher and flattening the curve.

Key to the chance of an early hike ​will be the outcome of Friday’s August payrolls report and consumer price data due on September 11.

Analysts are forecasting a bounce of 58,000 in jobs, following July’s shock drop of 23,000, with unemployment holding at 4.1%. It would probably need a much weaker outcome to greatly lessen the risk of a September rate move.

Higher yields combined with geopolitical stress pushed Japan’s Nikkei down ‌2.1%, while ⁠South Korean stocks fell 2.4%.

MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.7%.

Meanwhile, the Pakistani rupee extended its marginal gains, appreciating 0.01% against the US dollar on Monday. The local unit closed the day at 277.47, a gain of Re0.03 against the greenback.

Volume on the all-share index increased to 937.27 million from 658.33 million recorded in the previous close.

The value of shares declined to Rs39.13 billion from Rs31.45 billion in the previous session.

Cnergyico PK was the volume leader with 293.18 million shares, followed by Waves Home (R) with 71.23 million shares, and B.O.Punjab with 52.29 million shares.

Shares of 503 companies were traded on Monday, of which 169 registered an increase, 302 recorded a fall, and 32 remained unchanged.