Pakistan stock market plunges 3.2% on escalating Middle East conflict
PKR also weakens against the US dollar
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
A snapshot of trading activity at the Pakistan Stock Exchange on Monday
PSX Website
The Pakistan Stock Exchange suffered a colossal loss in excess of 3% on Monday as the war between Israel and Iran intensified following U.S. intervention over the weekend.
The PKR also weakened against the US dollar.
The share market opened on a negative note, losing 3.2% or 3,855 points to close at 116,167 points.
The main factor behind this decline was the Middle East war and the U.S. airstrikes on Iranian nuclear facilities. The development spiked crude oil prices, which reached to a five-month high on fears that the war would lead to a decline in supply and the Strait of Hormuz being blocked, through which around 20% to 30% of crude oil supplies are transported.
Meanwhile, the Pakistani rupee closed at PKR 283.87 per dollar, down 17 paise.
U.S. President Donald Trump said he had "obliterated" Iran's main nuclear sites in strikes over the weekend, joining an Israeli assault in an escalation of conflict in the Middle East as Tehran vowed to defend itself.
Israel carried out fresh strikes on Iran on Monday including on the capital Tehran and Iran's nuclear facility of Fordow which was also a target of the U.S. attack.
Volatile session
An analyst from Ismail Iqbal Securities said that the stock market closed on a "very negative note" following a volatile session, as ongoing geopolitical tensions and continued volatility in international oil prices dampened investor confidence, prompting risk-off sentiment across the board.
Cement, oil & gas exploration companies, and commercial banks were the major laggards in today's session, cumulatively shedding 1,700 points from the index.
An analyst from Topline Securities also said that investor sentiment was dampened by rising geopolitical tensions, especially the intensifying conflict between Iran and Israel, which led to heightened uncertainty and widespread risk aversion. This nervousness triggered broad-based panic selling.
An analyst from Al-Habib Capital Market said that the market opened with negative sentiment, as the benchmark KSE-100 index plunged to an intraday low of 115,887.48 points, down by 4,135.76 points, amid fears of escalating geopolitical tensions.
He added that the market remained under pressure despite positive developments on the circular debt front, where the government secured a PKR 1.275 trillion loan at KIBOR minus 0.9%
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