PSX Drops 1,486 Points as US-Iran War, $100 Oil Rattle Investors
KARACHI, PAKISTAN — WEB DESK: The Pakistan Stock Exchange (PSX) extended its decline on Thursday, with the benchmark KSE-100 Index falling 1,486 points by midday as escalating Middle East tensions and international oil prices above $100 a barrel continued to unsettle investors.
At midday, the KSE-100 stood at 170,457.57 points, down 1,486 points, or 0.86%, from Wednesday’s close of 171,943.59.
The index briefly reached an intraday high of 171,945.83 before selling pressure pushed it as low as 170,054.92.
By that point, KSE-100 volume stood at 143.37 million shares, with traded value reaching approximately Rs8.10 billion.
US-Iran Conflict Keeps Investors on Edge
The primary pressure on sentiment remained the escalating conflict involving the United States and Iran.
Fresh attacks on shipping around the Strait of Hormuz have intensified fears that energy supplies from the Middle East could face further disruption.
Brent crude remained above the psychologically important $100-per-barrel level on Thursday. Reuters reported Brent at $100.50 a barrel at 0619 GMT, while US West Texas Intermediate stood at $95.58.
The renewed maritime escalation is particularly important for Pakistan because the country depends heavily on imported energy.
Higher international oil prices can increase Pakistan’s import costs and place additional pressure on inflation and the external account.
Banks, Cement and Fertiliser Stocks Face Selling
Selling was visible across several heavyweight sectors at the PSX.
Commercial banks, cement companies, fertiliser producers, oil and gas exploration firms and oil marketing companies came under pressure during the morning session.
Among major stocks trading lower were Fauji Fertilizer Company (FFC), MCB Bank, Lucky Cement, Meezan Bank, Mari Energies, Oil and Gas Development Company (OGDC) and Pakistan State Oil (PSO).
Weakness across index-heavy companies contributed significantly to the KSE-100’s decline.
Selective buying in some stocks offered limited support, but the overall market remained bearish.
PSX Extends Multi-Day Losing Streak
Thursday’s decline extended a broader sell-off at the Pakistan Stock Exchange.
On Wednesday, the KSE-100 had fallen 698.56 points, or 0.40%, to close at 171,943.60 as rising crude prices and geopolitical uncertainty weighed on sentiment.
A day earlier, the index had dropped almost 994 points, closing at approximately 172,642 as investors reacted to the continuing US-Iran conflict and higher energy prices.
On Monday, the benchmark had already lost 1,692.74 points, or 0.97%, closing at 173,636.08.
The consecutive declines show how quickly geopolitical risk has overtaken earlier optimism in Pakistan’s equity market.
$100 Oil Raises Pakistan Inflation Concerns
For Pakistani investors, one of the biggest concerns is the impact of expensive crude on domestic inflation.
Global oil prices have risen sharply as attacks on shipping and threats to regional energy infrastructure raise concerns over supply.
Reuters reported Thursday that Brent has gained nearly 30% from early-August lows, while traffic through the Strait of Hormuz remains substantially below pre-war levels.
Before the conflict, around one-fifth of global oil and gas supplies passed through the strategic waterway.
For Pakistan, prolonged disruption could translate into a larger energy import bill, pressure on foreign-exchange requirements and higher domestic transportation and production costs.
Petrol and Diesel Prices Already Increased
The global energy shock is already being reflected in domestic fuel costs.
Pakistan has increased the price of petrol by Rs3.40 per litre and high-speed diesel by Rs6.72 per litre, taking petrol to Rs367.75 per litre and HSD to Rs392.67 per litre.
Further increases in international crude prices could create additional pressure during future domestic pricing reviews, although changes in Pakistani pump prices also depend on exchange rates, taxation, petroleum levies and government pricing decisions.
The connection between global crude and domestic inflation is one reason investors are closely watching the Middle East conflict.
Interest-Rate Outlook Comes Into Focus
Higher oil prices also have potential implications for monetary policy.
If expensive energy produces sustained inflationary pressure, expectations for interest rates could change.
Higher borrowing costs can weigh on equities by raising corporate financing expenses and making fixed-income investments relatively more attractive.
However, it would be premature to conclude that the State Bank of Pakistan will change interest rates specifically because of the latest oil surge.
Future monetary policy decisions will depend on broader inflation, growth, currency and external-account data.
Pakistan Still Has Some Macroeconomic Cushion
The market decline comes despite some positive economic indicators.
Workers’ remittances rose to about $3.7 billion in August, representing year-on-year growth of roughly 17%, while remittances during the first two months of FY2026-27 reached approximately $7.3 billion.
Strong remittance inflows provide important foreign-exchange support, particularly when higher energy costs threaten to increase import requirements.
However, investors remain concerned that sustained triple-digit crude prices could offset some of those gains through a larger import bill.
Global Markets Also Under Pressure
Pakistan is not alone in facing oil-related market pressure.
Asian stocks declined on Thursday as geopolitical concerns and Brent above $100 weighed on risk appetite.
The broader MSCI Asia-Pacific index was down around 0.7%, while Japan’s Nikkei and South Korea’s KOSPI also traded lower.
US markets had also closed lower on Wednesday, with the S&P 500 declining 0.48%, the Nasdaq losing 0.64% and the Dow Jones Industrial Average falling 0.77%.
The global reaction underscores that investors increasingly view the Middle East conflict as both a security crisis and an inflation risk.
Market Direction Depends on Middle East Developments
PSX direction during the remainder of Thursday’s session will depend heavily on fresh geopolitical developments and movements in international crude prices.
Any easing of US-Iran tensions or improvement in shipping conditions around Hormuz could reduce some of the market’s risk premium.
Further attacks on tankers, energy facilities or shipping routes could have the opposite effect.
For Pakistan, investors are watching not only the immediate security situation but also its potential impact on oil imports, inflation, the rupee, monetary policy and corporate profitability.
The key point for publication is that the 1,486-point decline represents the market’s midday position rather than Thursday’s final closing figure.
