The equity market fell on Monday as soaring oil prices, rising bond yields and escalating Middle East tensions fuelled fears over imported inflation and pressure on Pakistan’s external account.
"Stocks witnessed selling amid concerns for Middle East conflict impacting industrials output and surging interest rates," said Ahsan Mehanti, Managing Director and Chief Executive Officer of Arif Habib Commodities.
"Surging Govt bond yields, higher crude oil prices impacting external account played catalyst role in bearish activity at PSX," he added.
The Pakistan Stock Exchange's (PSX) benchmark KSE-100 Index reached an intraday high of 151,813.61, up 106.10 points, or 0.07%, and a session low of 144,656.97, down 7,050.54 points, or 4.65%, against the previous close of 151,707.51.
Oil rallied as the conflict entered its fifth week, with Yemen's Houthi rebels saying they fired cruise missiles and drones at strategic sites in Israel, adding to concerns about a widening theatre and disruption risks around the Red Sea and the Strait of Hormuz.
Saudi Arabia rerouted much of its oil exports via the Red Sea to avoid Hormuz, which the report said has been effectively closed, pushing crude to its highest level since earlier in the month; Brent climbed close to $117 a barrel at one point.
Risk aversion also hit global equities, with heavy falls reported across Asian markets after Wall Street's sell-off.
Adding to the cautious mood were US President Donald Trump's remarks about wanting to "take the oil in Iran" and that the United States could take Kharg Island "very easily", while Iran's parliament speaker warned Washington was “secretly planning a ground attack".
Foreign flows remained under pressure. State Bank of Pakistan (SBP) data showed overseas investors withdrew a net $177.9 million from Pakistan's Treasury Bills (T-bills) as of March 19, compared with $31.2 million in February, while also selling $21 million in Pakistan Investment Bonds (PIBs) and $148.7 million from their Pakistan Stock Exchange portfolios by March 19.
Overall, the report said foreign investors sold T-bills, PIBs and equities worth $348 million as heightened global risk sentiment and higher oil prices drove a flight from emerging-market exposure.
On the inflation front, weekly inflation measured by the Sensitive Price Indicator (SPI) rose 0.97% in the week ended March 26 to 345.45 points, and was up 8.24% year-on-year, the Pakistan Bureau of Statistics (PBS) said.
On Friday, the KSE-100 Index extended losses, shedding 1,200.45 points (0.79%) to close at 151,707.52 from 152,907.97, trading between 153,660.89 and 151,457.95.
