Pakistan Stock Market Suffers Sharp Drop Amid Middle East Tensions

The Pakistan Stock Exchange (PSX) faced a significant decline on Monday as investors grew concerned about potential Iranian retaliation following U.S. attacks on Iran’s nuclear facilities over the weekend. The escalating situation raised fears of wider global impacts and potential inflation risks.

The KSE-100 index dropped by 1,300 points during intraday trading, falling to 118,700 points. This sharp decline came just after Friday’s positive close, where the index had gained 20.65 points to reach 120,023.24.

Meanwhile, oil prices surged on Monday, hitting their highest levels since January. Brent crude rose by $1.52, or 1.97%, to $78.53 per barrel, while U.S. West Texas Intermediate crude increased by $1.51, or 2.04%, to $75.35 per barrel. Earlier in the day, both oil benchmarks spiked over 3%, reaching five-month highs before slightly easing.

The surge in oil prices followed U.S. President Donald Trump’s confirmation that key Iranian nuclear sites were heavily targeted in coordinated strikes with Israel, marking a sharp escalation in the Middle East conflict. Iran has since vowed to respond, adding further uncertainty to the global markets.