The Pakistan Stock Exchange (PSX) witnessed another turbulent session on Thursday, as the benchmark KSE-100 Index plunged by more than 3,400 points amid escalating tensions in the Middle East, triggering widespread panic among investors.
Market activity remained under heavy pressure throughout the day, with selling seen across almost all major sectors. The index dropped close to the 150,000 level during intraday trading, reflecting the growing uncertainty in both local and global markets.
Analysts say the latest downturn is largely linked to the ongoing geopolitical crisis involving Iran and its regional fallout, which has already disrupted global energy markets. The conflict has pushed international oil prices sharply higher, creating fears of inflation, rising import costs, and economic instability for oil-importing countries like Pakistan.
The impact is not limited to Pakistan. Global stock markets have also come under pressure, with investors shifting towards safer assets amid fears of prolonged conflict and supply disruptions. Oil prices have surged above $100 per barrel in recent days, adding to market volatility and weakening investor sentiment worldwide.
At the PSX, key sectors including banking, cement, oil and gas, and technology stocks faced heavy selling. Market participants attributed this to foreign investor outflows and local investors booking profits to avoid further losses.
This is not the first major drop in recent weeks. The KSE-100 Index has already experienced several sharp declines since the start of March, including historic single-day losses triggered by the same geopolitical tensions. In some sessions earlier this month, trading had to be temporarily halted after massive sell-offs.
Financial experts warn that Pakistan’s economy remains highly vulnerable to external shocks, especially fluctuations in oil prices. With the country heavily dependent on imported fuel, any sustained increase in global prices can widen the trade deficit, weaken the rupee, and add pressure on inflation.
Investor sentiment has also been affected by uncertainty over the country’s economic outlook, including concerns about foreign exchange reserves, interest rates, and ongoing negotiations with international lenders.
Despite the sharp fall, some analysts believe the market could stabilise if geopolitical tensions ease in the coming days. They advise investors to avoid panic selling and instead focus on long-term fundamentals.
For now, however, the mood at the PSX remains cautious, with traders closely watching global developments, particularly in the Middle East, which continue to dictate market direction.