KARACHI: The Pakistan Stock Exchange (PSX) witnessed a sharp decline on Wednesday after US President Donald Trump declared that the interim agreement with Iran was “over,” triggering investor concerns over renewed geopolitical tensions in the Middle East.
The benchmark KSE-100 Index fell 6,449.34 points, or 3.46%, closing at 179,806.21 points, compared with the previous session’s close of 186,255.55 points, as widespread selling pressure swept across the market.
What Triggered the Market Sell-Off?
Investor sentiment weakened after Trump’s remarks raised fears of renewed conflict involving Iran, prompting concerns over regional stability and the potential impact on global financial markets.
The uncertainty also pushed oil prices higher, increasing concerns over inflationary pressures and economic risks for energy-importing countries, including Pakistan.
Broad-based selling was observed across major sectors as investors moved to reduce exposure amid heightened geopolitical uncertainty.
What Are Market Experts Saying?
Ahfaz Mustafa, Chief Executive Officer of Ismail Iqbal Securities, said the market reacted negatively to concerns that the ceasefire with Iran had effectively collapsed.
According to Mustafa, Trump’s statement unsettled both oil and equity markets, resulting in a sharp decline in share prices as investors responded to the heightened geopolitical risk.
What Is the Broader Market Outlook?
Analysts said market direction will largely depend on developments in the Middle East, particularly the trajectory of US-Iran relations and movements in global oil prices.
Investors are expected to closely monitor geopolitical developments, as prolonged regional instability could continue to fuel volatility in Pakistan’s equity market and other emerging markets.