PSX plunges over 3,000 points amid uncertainty

The Pakistan Stock Exchange (PSX) witnessed a sharp decline on Monday, as the benchmark KSE-100 index fell by more than 3,000 points during intraday trading amid renewed uncertainty in global and geopolitical conditions.

By 1:39pm, the KSE-100 index had dropped by 3,145.02 points or 1.81 percent, reaching 170,793.99 compared to the previous close of 173,939.01 points. The sudden downturn reflects growing investor caution over external developments, particularly uncertainty surrounding the possible second round of United States-Iran talks expected to be held in Islamabad.

Market analysts say the volatility is largely driven by concerns over regional stability and its potential impact on financial flows and commodity prices. Investors remained cautious throughout the session, leading to widespread selling pressure across key sectors.

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This decline comes just days after the PSX had shown strong recovery momentum. Last week, the KSE-100 index gained 4 percent week-on-week, closing at 173,939 points with an increase of 6,748 points, according to Arif Habib Ltd. The recovery was supported by easing geopolitical tensions in the Middle East and expectations of monetary easing amid declining global oil prices, which helped improve inflation outlook.

Earlier, the index had even crossed its pre-war level of 168,062 points recorded on April 15, signaling a strong rebound in market sentiment. However, it still remains significantly below its all-time high of 189,166.83 points reached on January 23.

Market experts believe that while the underlying fundamentals show signs of recovery, short-term volatility is being driven by external geopolitical risks and uncertainty over diplomatic engagements. Investors are expected to remain cautious until clarity emerges on global negotiations and regional developments.