Stocks at the bourse traded lower on Monday as the US–Iran war entered its third week with no clear signs of de-escalation, keeping investors risk-averse ahead of the Eid holidays.
"Market sentiment remained negative as the US-Iran war entered its third week with no visible signs of de-escalation," said Huzaifa Riaz, Director, Mayari Securities (Pvt) Limited.
"Going forward, the market is likely to take cues from geopolitical developments, and any indications of an off-ramp could boost positivity," he added.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index settled at 149,178.66 points, down 4,687.5 points, or 3.05%, from the previous close of 153,866.16.
The index traded between a high of 153,943.69 (up 77.53 points, or 0.05%) and a low of 148,747.72 (down 5,118.44 points, or 3.33%).
Oil hovered around $100 a barrel, and equities were volatile as diplomats sought safe passage for tankers through the Strait of Hormuz. Crude spiked early after US President Donald Trump said forces struck military targets on Kharg Island.
He warned attacks could expand to energy infrastructure if Tehran interferes with transit through Hormuz, which has been effectively closed since the US-Israel operations began on February 28. Iran’s Fars news agency later reported that no oil infrastructure was damaged.
Brent jumped about 3% to as high as $106.50 before paring gains, while WTI hovered around $99.
Asian markets were mixed amid energy-crisis concerns, with Tokyo, Shanghai, Sydney, Wellington, Taipei, Manila and Jakarta all down, though Hong Kong, Seoul, Singapore, Mumbai and Bangkok rose.
AKD Research said the PSX is likely to remain hostage to Middle East developments, warning that further escalation could sustain selling pressure, while any de-escalation could trigger a meaningful recovery. It noted the recent correction has pushed forward price-to-earnings to 6.6 times, a level it views as attractive.
Arif Habib Limited (AHL) Research said the KSE-100 is trading at a price-to-earnings of 7.7 times and offering a dividend yield of around 6.6%, with top picks including NBP, OGDC, PPL, FFC, LUCK, HUBC, PSO and ATRL.
The benchmark fell 3,630 points (2.3%) over the week to close at 153,866 on Friday. In the previous session, the KSE-100 closed at 153,866.16, down 555.27 points (0.36%) from 154,421.43.
