PSX dips nearly 1,000 points as Middle East tensions weigh on investor sentiment

The Pakistan Stock Exchange’s benchmark KSE-100 index declined by nearly 1,000 points on Tuesday over tensions in the Middle East.

The KSE-100 index dropped by 1,904.31 points, or 1.10 per cent, to stand at 171,731.76 points at 1:39pm from the previous close of 173,636.07.

The market reached an intraday low of 171,490.63 points at around 1:30pm. It then recovered some midday losses to close at 172,642.16 points, still 993.91 points (0.57pc) lower than the previous close.

Awais Ashraf, director of research at AKD Securities, noted that the “prolongation of tensions” between the United States and Iran was weighing on investor sentiment.

“Moreover, the increase in oil prices is also adding to the pressure,” he added.

However, Ashraf remarked that “robust macroeconomic indicators, along with recent tapping of the international Eurobond market provides cushion to policymakers in comparison to previous shocks”.

Recent attacks by Houthis on Saudi Arabia’s energy facilities have added to the regional tensions, with global oil prices hitting multi-week highs.

World oil prices rallied on Tuesday, once more closing in on $100 a barrel, and stock markets mostly retreated owing to a flare-up in the Middle East war.

Brent earlier rose to as much as $99.22 a barrel, its highest since July 24, while US West Texas Intermediate crude reached $94.60 a barrel, its highest since June 8.

The situation in the Middle East and political uncertainty have impacted investor sentiment, triggering profit-taking across the board this week. On Monday, the stock market failed to sustain the weekend’s mild recovery, dipping by 1,692.74 points to close at 173,636.08.