The Pakistan Stock Exchange (PSX) remained under pressure on Friday, extending losses from the previous session as escalating tensions between the United States and Iran, combined with soaring global oil prices, weighed heavily on investor confidence.
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During intraday trading, the benchmark KSE-100 Index dropped as much as 2,226.56 points, or 1.3%, to a low of 169,512.88. The index later recovered some ground but remained in negative territory, reaching an intraday high of 171,208.55, still down 530.89 points from the previous close.
The decline followed Thursday’s sharp sell-off, when the KSE-100 Index fell 2,690.48 points, or 1.54%, to close at 171,739.44. Analysts attributed the continued weakness to growing geopolitical uncertainty and concerns that higher energy prices could increase inflationary pressures.
Ahsan Mehanti, Managing Director and Chief Executive Officer of Arif Habib Commodities, said investor sentiment remained fragile due to the global equity market decline, rising tensions in the Middle East and concerns over the economic impact of higher oil prices. He added that fears of prolonged inflation and expectations of a tighter monetary policy by the State Bank of Pakistan also contributed to the bearish trend.
Market pressure intensified after the United States launched another round of strikes on Iran following attacks by Iran-backed Houthi rebels on oil tankers in the Red Sea. The escalating conflict pushed Brent crude above $100 per barrel for the first time since May, increasing concerns about disruptions to global energy supplies.
International markets also reacted cautiously as investors monitored developments in the Middle East. United Nations Secretary-General António Guterres warned that the conflict risked spiralling further, while European Central Bank President Christine Lagarde cautioned that higher energy costs could fuel inflation and influence future interest rate decisions.
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With geopolitical tensions showing little sign of easing, analysts expect volatility to persist in the PSX as investors closely monitor oil prices, regional developments and monetary policy expectations.