The Pakistan Stock Exchange (PSX) extended its losing streak on Wednesday as regional tensions between Iran and Israel cast a shadow over investor confidence. The benchmark KSE-100 Index fell by 1,505.11 points, closing at 120,465.93 — a drop of 1.23% from the previous day.
Market Volatility Intensifies
Throughout the session, the index touched an intraday low of 120,417.99, reflecting a 1.27% loss. Although it briefly reached a high of 121,905.49, it still ended down 65.55 points. Analysts warned that the market will likely stay volatile over the coming weeks until there is greater clarity on how the conflict may impact Pakistan.
Independent analyst AAH Soomro noted, “The market is likely to remain choppy until there’s clarity on the regional crisis and its impact on Pakistan’s geopolitical positioning.” He added that any further spike in oil prices, especially beyond $80 per barrel, could worsen Pakistan’s inflation outlook and strain its fragile economy.
Read: PSX Tumbles as Israeli Strikes on Iran Jolt Regional Markets
Oil Prices Surge Amid Crisis
Oil prices surged 2% on Tuesday after US President Donald Trump left the G7 summit early to oversee the evolving Iran-Israel conflict. His warnings to Tehran residents to evacuate added to fears of escalation. Since Friday, oil prices have swung between gains and losses. However, the International Energy Agency’s 2025 report tempered expectations, forecasting a dip in global oil demand by 2030 — the first since the COVID-19 era.
Economic Headwinds Build
On Monday, the State Bank of Pakistan (SBP) held its policy rate steady at 11%, highlighting inflation risks stemming from geopolitical instability. In its statement, the SBP cautioned that the ongoing conflict could disrupt Pakistan’s external balance and drive up prices. Imports have been rising due to domestic recovery, while exports lag amid a global trade slowdown.
Investors on Edge
With the conflict escalating and no ceasefire in sight, investor sentiment remains subdued. On Tuesday, the KSE-100 had already dropped 254 points. Wednesday’s steeper loss underscores growing concern over the regional fallout and its economic implications for Pakistan.
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