PSX drops sharply as geopolitical tensions and oil price surge hit sentiment

The Pakistan Stock Exchange (PSX) witnessed a steep decline on Monday as heavy selling pressure dominated trading, driven by rising global uncertainty and sharp movements in international oil prices.

The benchmark KSE-100 Index opened on a weak note, plunging by 5,353.67 points at the start of the session. Volatility persisted throughout the day, with the index falling further to 162,624.06, down 4,567.31 points or 2.73% by 10:29am. Although some recovery was seen later in the session, losses remained significant, with the index down 4,450.97 points (2.66%) at 162,740.40 by 12:49pm.

Market sentiment came under pressure following the conclusion of Pakistan-hosted talks between the United States and Iran, which ended without an agreement. The lack of progress, coupled with rising geopolitical uncertainty, triggered concerns across global financial markets.

PSX surges as ceasefire lifts investor sentiment

Adding to the negative sentiment was a sharp surge in global crude oil prices, which jumped more than 7% to cross $100 per barrel. The increase followed reports of escalating tensions after US President Donald Trump announced a blockade on maritime traffic to and from Iranian ports via the Strait of Hormuz, a critical global energy route.

Market analysts said the combination of stalled diplomatic progress and rising energy prices weighed heavily on investor confidence. According to KTrade Securities equity trader Ahmed Sheraz, the absence of a breakthrough in negotiations contributed to cautious sentiment, while oil prices rising to around $104 per barrel added further pressure on equities.

Despite the downturn, analysts noted that market conditions may remain volatile in the near term as geopolitical developments continue to evolve. However, they maintained a cautiously optimistic outlook, citing expectations that ongoing ceasefire arrangements and future negotiation rounds could help stabilise sentiment.

Reports also suggest that Qatar and Switzerland may host the next phase of US-Iran discussions, which could serve as a key catalyst for market direction in the coming weeks.