PSX Surges Over 2,000 Points After Sharp Market Decline

Pakistan Stock Exchange – (Web Desk) – The Pakistan Stock Exchange (PSX) staged a strong comeback on Tuesday, climbing more than 2,000 points after suffering a massive correction a day earlier. The previous session had wiped out over 16,000 points amid growing tensions in the Middle East, which rattled investor confidence.

The benchmark KSE-100 Index rose by 2,098.10 points, or 1.38%, reaching 154,071.09 points. This recovery followed Monday’s sharp plunge, when the index had closed at 151,972.99 after a dramatic fall of 16,089.17 points.

Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company, said the market’s rebound was expected after such a steep decline, describing it as a natural correction following heavy losses.

Maaz Mulla of Topline Securities explained that Monday’s selloff was largely driven by panic and heavy mutual fund selling, placing the PSX among the worst-performing markets globally. He noted that Tuesday’s recovery reflects a technical bounce, as investors looking for value stepped in once selling pressure eased. However, he cautioned that it remains to be seen whether the market can sustain this momentum or if it will prove to be a short-lived rally.

Globally, markets remained under pressure. A fresh wave of selling hit equities while the US dollar strengthened, as investors weighed the economic impact of US and Israeli strikes on Iran, particularly on energy prices and global growth. MSCI Asia Pacific ex Japan Index fell 1.5% for a second straight day, with South Korean shares dropping as much as 4.1%. Japan’s Nikkei 225 declined 2.3%, while S&P 500 futures slipped 0.6%, reflecting continued investor caution worldwide.

“Economic policy uncertainty was already elevated and now with the Iran conflict, the geopolitical risk is expected to rise too,” said Rupal Agarwal, Asia quant strategist at Bernstein in Singapore. “Last time both spiked was in 2022 during the Russia-Ukraine conflict, which didn’t work well for Asian markets.”

US President Donald Trump sought to justify a broad, open-ended war on Iran, saying on Monday the campaign was ahead of expectations.

With no end to hostilities in sight, an official from Iran’s Revolutionary Guards said on Monday that the Strait of Hormuz is closed to marine traffic and the country will fire on any ship trying to pass.

Middle East War Shocks Pakistan Stock Market

The threat had an immediate impact, pushing the cost of hiring a supertanker to ship oil from the Middle East to China to a record high of more than $400,000 a day, LSEG data showed.

After oil and gas prices surged on Monday, Brent crude futures LCOc1 tacked on another 2% to $79.22 on Tuesday. In natural gas markets, benchmark European TFMBMc1 and Asian LNG prices leapt by around 40% on Monday.