PSX plunges over 6,000 points amid rising US-Iran tensions

KARACHI (Web Desk) – The Pakistan Stock Exchange (PSX) saw a significant drop on Thursday, with the KSE-100 Index losing over 6,000 points, driven largely by growing concerns over escalating tensions between the United States and Iran.

The benchmark index initially reached a peak of 188,923.39, marking an increase of 543.01 points, or 0.29%, before plunging to a low of 181,961.14, reflecting a sharp drop of 6,419.24 points, or -3.41% for the day.

Economic analysts highlighted that market volatility was largely due to the rising geopolitical risks surrounding the US-Iran conflict. “Investor sentiment turned negative amid fears of a potential military confrontation between the two countries,” said an expert in the field.

The situation worsened after US President Donald Trump issued a stern warning to Iran, emphasizing that time was running out for diplomatic efforts to prevent military action. Trump pointed to the deployment of a US naval strike group in the region and called for renewed talks on Iran’s nuclear program, further heightening the regional risk perception among investors.

PSX Crosses 190,000 Mark Ahead of MPC Meeting

Earlier this month, the State Bank of Pakistan (SBP) decided to maintain its policy rate at 10.5% for the upcoming two months. The central bank noted that December’s consumer price index (CPI) of 5.6% aligned with expectations, while core inflation remained steady at around 7.4%.

The Monetary Policy Committee (MPC) highlighted the continued strong growth in certain economic sectors, including large-scale manufacturing (LSM), but also flagged concerns about a widening trade deficit due to increased imports and weaker exports. On a positive note, remittances were seen as a stabilizing factor for the current account, and global commodity prices remained favorable.