The Pakistan Stock Exchange (PSX) witnessed a sharp plunge on Friday as regional instability escalated following confirmed Israeli strikes on Iranian nuclear and military sites. The benchmark KSE-100 Index, which had shown strong momentum in recent sessions, dropped drastically amid panic-selling and investor anxiety.
The index opened at a high of 123,058.06, but quickly reversed course, shedding as much as 2,488.53 points to reach a session low of 121,604.59, a 2.01% decline. By the closing bell, the index had pared some losses but still ended the day with a significant drop of 1,035.06 points or 0.83%.
“Early morning reports of an Israeli attack on Iran initially sent the equity market into a sharp decline, though some recovery has since been observed,” said Amreen Soorani, Head of Research at Al Meezan Investment. “This event has significantly escalated geopolitical uncertainty, a sentiment clearly reflected in the immediate 8% surge in oil prices.”
She added that the broader market reaction in the coming days would depend on how the situation evolves and whether tensions expand into a larger regional conflict.
Read: US Distances Itself from Israeli Strike, But Knew in Advance
Regional Markets, Oil Prices React Sharply
The shockwaves from Israel’s massive aerial operation—codenamed Operation Rising Lion—rippled through regional financial markets. According to Israeli officials, around 200 fighter jets were used to target nearly 100 locations in Iran, including Tehran, Natanz, and northwestern military installations.
Blasts were confirmed at a Revolutionary Guard Corps facility and the Natanz uranium enrichment plant. The UN nuclear watchdog, the IAEA, stated that it is closely monitoring the impact and radiation levels at the nuclear sites.
Iranian state media reported the deaths of two senior military officials: Revolutionary Guards chief Hossein Salami and Chief of Staff Mohammad Bagheri, along with at least 50 civilian injuries. In response, Iran reportedly launched around 100 drones toward Israel.
The escalating confrontation caused crude oil prices to spike by 8%, weighing heavily on oil-importing economies like Pakistan. Energy companies and refineries saw volatile trading throughout the day, with investor caution dictating sell-offs across multiple sectors.
Monetary Policy in Focus Amid Uncertainty
Adding to market uncertainty, the State Bank of Pakistan (SBP) announced it will hold its Monetary Policy Committee (MPC) meeting on Monday, June 16, to determine the benchmark interest rate. The decision will come amid a volatile global backdrop and concerns about imported inflation due to higher oil prices.
In the previous trading session on Thursday, the KSE-100 Index had already shown signs of fatigue, retreating by 259.56 points (0.21%) to close at 124,093.12, after surging earlier to a record 126,718.28.
With geopolitical tensions at their highest in years and global markets bracing for possible aftershocks, investor sentiment remains fragile. Analysts predict continued volatility in the days ahead as markets weigh the economic fallout from escalating conflict between Israel and Iran.
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