KSE-100 Plunges Over 3,500 Points as Trump’s “Stone Age” Warning Kills Yesterday’s Iran Rally
The KSE-100 index shed over 3,500 points on Thursday, April 2, reversing most of Wednesday’s extraordinary 6,768-point gain as US President Donald Trump’s late-night warning of intensified military strikes on Iran shattered investor hopes of a near-term ceasefire. The index — which had closed Wednesday at 155,511.57 — opened deep in the red, touching an intraday low of 150,022.43 before partially recovering.
Today’s Session at a Glance
At 1:40 pm, the benchmark KSE-100 index was hovering at 150,896.83, down 4,614.73 points or 2.97% from the previous close of 155,511.57.
Pakistan’s main stock market index, the KSE-100, fell to 152,033 points on April 2, 2026, losing 2.24% from the previous session.
| Metric | April 2, 2026 | April 1, 2026 |
|---|---|---|
| KSE-100 Close | ~152,033 | 155,511.57 |
| Change (Points) | -3,500 approx. | +6,768.25 |
| Change (%) | -2.24% | +4.55% |
| Intraday Low | 150,022.43 | 151,262.76 |
| Previous Month Close | 148,743.32 (Mar 31) | — |
Selling was observed in key sectors, including automobile assemblers, cement, commercial banks, oil and gas exploration companies, OMCs and power generation. Index-heavy stocks, including MARI, OGDC, POL, PPL, MCB, MEBL, NBP and UBL, traded in the red.
What Triggered the Reversal — Trump’s “Stone Age” Speech
The bearish trend in Thursday’s trading came after Trump’s primetime address to the nation, in which he indicated that the US-led military campaign in Iran — conducted alongside Israeli forces — could reach its conclusion within the coming weeks, while warning that operations would intensify over the next two or three weeks before any resolution. Trump described the conflict as a decisive victory, asserting that the US was “very close” to completing its objectives in Iran and said, “We are going to hit them extremely hard over the next two to three weeks,” adding that Tehran would be pushed back to what he termed the “Stone Ages.”
That single speech erased the conditions that drove Wednesday’s 4.55% surge. Behtari Capital summed up the mood bluntly: “The euphoria of yesterday’s market halt has been completely wiped out.” The brokerage said the market was reacting to a “triple threat” — US-Iran escalation, a hike in oil prices, and a surge in CPI inflation.
Oil Prices Surge — Compounding Pakistan’s Exposure
Oil surged after Trump’s address did little to ease concerns over the closure of the Strait of Hormuz, with Brent climbing more than 4%.
AAH Soomro, independent investment and economic analyst, said: “Yesterday’s Trump statement to continue fighting for 2 to 3 weeks and Iran’s comments on no ceasefire has increased oil prices today by 5 to 7%. That is dampening the mood.”
For Pakistan — a major oil importer — every sustained move higher in Brent translates directly into larger import bills, wider current account pressure, and renewed fuel price hike expectations at the pump.
CPI and SBP Rate Cut Hopes — Also Shattered
Behtari Capital noted: “CPI inflation has climbed to 7.3%. The combination of high energy costs and rising inflation has shattered hopes for a near-term interest rate cut by the State Bank of Pakistan.”
Huzaifa Riaz, Director at Mayari Securities (Pvt) Limited, said: “The remarks signal potential escalation, keeping investors on edge and reinforcing a risk-off mood, with volatility likely to persist in the near term.”
The SBP currently holds its policy rate at 12%. With March CPI breaching the 7% upper target band for the first time since August 2024, and oil prices back on an upward trajectory, the MPC’s May 2026 meeting now carries materially less room for a rate cut than markets had priced in following January’s hold decision.
Wednesday’s Rally — What Was Built and Then Lost
To put Thursday’s reversal in context: Wednesday’s KSE-100 session recorded a trading volume of 670.867 million shares with a traded value of Rs 43.979 billion, compared to 434.958 million shares valuing Rs 22.541 billion in the previous session. Market capitalisation increased to Rs 17.215 trillion from Rs 16.534 trillion. Out of 485 active companies, 365 advanced, 67 declined, and 53 remained unchanged.
The PSX had temporarily halted after the KSE-30 index rose 5% from the previous day’s close, activating the exchange’s circuit breaker mechanism — all equity markets were suspended at 12:03:45pm, and all outstanding orders were automatically cancelled.
That historic intraday halt — the first triggered by a bullish move in months — proved short-lived. Within 18 hours, Trump’s speech reversed the entire geopolitical thesis underpinning the rally.
For equity investors, Thursday’s session confirms that PSX remains in a headline-driven trading environment where geopolitical statements from Washington carry more immediate weight than domestic fundamentals. Over the past month, the KSE-100 has declined 3.25%, though it remains 27.82% higher than a year ago.The index’s range of 140,000 to 160,000 points has held through the crisis, but a sustained resolution to the Iran conflict — or a decisive breakdown below 148,000 — will determine whether the market exits this volatile band. For investors with positions in banks, E&P companies, OMCs, and cement, near-term earnings visibility remains clouded by oil price uncertainty, inflation trajectory, and the SBP’s rate decision in May.
The PSX’s March 2026 performance was its worst in six years, with the KSE-100 declining roughly 15% from its January 2026 high of approximately 191,000 points as the US-Iran conflict, Strait of Hormuz disruptions, and a Rs 55 per litre fuel price hike triggered a sustained sell-off. The brief de-escalation rally of April 1 — and Thursday’s reversal — illustrate exactly how binary the market’s near-term direction has become: one Trump speech in either direction moves the KSE-100 by thousands of points within hours.