The Pakistan Stock Exchange (PSX) declined sharply asPSX falls on Middle East tensions became the dominant market theme on Thursday. Investor sentiment weakened after fresh doubts emerged over a possible Iran-US peace deal.
The benchmark KSE-100 Index recorded significant volatility, reflecting uncertainty across global and regional markets. During trading, the KSE-100 Index moved between a high of 157,591.23 and a low of 153,405.76.
At its lowest point, the index dropped 4,907.68 points, or 3.1%, from its previous close of 158,313.44. Even at its intraday high, the market remained down by 722.21 points. This sharp swing highlighted the fragile investor confidence, largely driven by geopolitical developments. Market analysts pointed to shifting sentiment as the key driver behind the decline.
According to analyst AAH Soomro, concerns grew after Iran signalled resistance to a proposed peace framework. This raised fears of prolonged conflict in the region.
He noted that the market remains sentiment-driven, with the broader economy showing cautious but gradual progress.
Global energy markets also influenced investor behaviour. Oil prices stabilised during the week, with Brent crude trading just above $100 and WTI near $90. However, the near closure of the Strait of Hormuz continues to cast uncertainty. The key shipping route accounts for around 20% of global oil and gas supply. This ongoing risk has added pressure on equity markets, including Pakistan’s.
Asian stock markets presented mixed signals after a recent rally. Markets in Tokyo, Hong Kong, Shanghai, Seoul, Manila, and Jakarta declined, while Singapore, Wellington, and Taipei recorded gains. Sydney remained largely unchanged. These mixed trends reflect broader global uncertainty tied to geopolitical developments.
Read: Pakistan War Economy Impact Deepens Economic Strain
Markets had briefly recovered earlier in the week after US President Donald Trump indicated progress in peace talks. Washington reportedly proposed a 15-point plan to end the conflict.
Meanwhile, Iranian officials outlined their own conditions for de-escalation. However, conflicting statements from both sides have kept investors cautious. Trump warned of strong action if no agreement is reached, while Iran’s foreign minister signalled reluctance to negotiate.
The current decline follows a strong rally in the previous session. On Wednesday, the KSE-100 Index surged 4,347.08 points, or 2.82%, closing at 158,313.44. That rebound was driven by optimism around diplomatic progress, which has now weakened amid renewed uncertainty.
