PSX falls sharply as US-Iran tensions near Strait of Hormuz spook investors

Pakistan Stock Exchange (PSX) witnessed a sharp decline on Friday as escalating geopolitical tensions between the United States and Iran near the Strait of Hormuz triggered risk-off sentiment among investors.

The benchmark KSE-100 index dropped by nearly 1,780 points, closing at 171,116 points, as markets reacted to renewed clashes and uncertainty over a fragile ceasefire and ongoing peace talks in the Middle East. Despite the decline, the index still posted a weekly gain of around 4.98%, reflecting earlier bullish momentum.

Market analysts said the session was largely driven by profit-taking after recent gains, combined with heightened global uncertainty. Crude oil prices remained elevated near the $99–101 per barrel range, further adding to investor caution due to concerns that disruptions in the Strait of Hormuz could affect global energy supply.

Brokerage reports highlighted that renewed skirmishes between US and Iranian forces near the strategic waterway raised fears of escalation, undermining confidence in diplomatic efforts to stabilize the situation. Weak performance in global equities also contributed to pressure on local markets.

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Heavyweights such as UBL, Engro Holdings, Meezan Bank, Pakistan Petroleum, Mari Energies, and OGDC collectively dragged the index down by over 800 points. Market breadth remained negative, with 73 declining stocks compared to 27 gainers.

Trading activity remained strong, with around 1 billion shares changing hands and total turnover recorded at Rs36.7 billion. Maple Leaf Cement, OGDC, DG Khan Cement, K-Electric, and Pakistan Petroleum were among the most actively traded stocks.

Analysts expect the market to find near-term support between 167,000 and 170,500 points, while a recovery toward 175,000 could depend on easing geopolitical tensions and improved investor sentiment.

Overall, the session reflected how global conflict risks continue to influence Pakistan’s financial markets, particularly through oil prices and foreign investor confidence.