The Pakistan Stock Exchange (PSX) experienced a severe downturn on Wednesday as panic selling erupted in response to the escalating US-Iran conflict, erasing a substantial portion of recent gains in a single session. The benchmark KSE-100 index plummeted by 4,626.18 points, or 2.48%, closing at 181,629.37.
Market Opens Sharply Lower
Trading began with a significant gap down after fresh US military strikes against Iran and tighter sanctions on Iranian crude exports. Within minutes of the opening bell, the index shed nearly 2,500 points, reflecting broad-based selling as investors moved toward safe-haven assets.
Losses Deepen on Trump Remarks
The decline accelerated in the afternoon after US President Donald Trump declared that an interim deal aimed at ending the war with Iran was over. This statement reignited fears of a prolonged conflict, drove global crude prices sharply higher, and accelerated the flight from risk assets across global markets. In the local market, panic selling intensified, pushing the KSE-100 to an intraday low of 179,510 around 2 pm—a staggering loss of over 6,700 points from the previous close.
Bargain Hunting in Final Hour
However, bargain hunting emerged in the final hour, allowing the market to recover approximately 2,100 points before the closing bell. Despite the sharp correction, trading activity remained robust, with 572 million shares changing hands, indicating healthy participation amid high volatility.
Sectors Hit Hard
Heavy stock liquidation was witnessed across major sectors, particularly oil and gas exploration, commercial banks, fertiliser, cement, power generation, and technology. Investors reduced exposure due to heightened uncertainty. According to Ahmed Sheraz, an equity trader at KTrade Securities, commercial banks, cement, oil and gas, fertiliser, investment banks, power, and technology stocks led the decline. Key contributors to the losses included United Bank, Fauji Fertiliser, Engro Holdings, Lucky Cement, Hub Power, HBL, Pakistan Petroleum, and OGDC.
Outlook Remains Uncertain
Looking ahead, Sheraz noted that market direction would largely depend on developments in the Middle East, particularly around the Strait of Hormuz and their impact on oil prices. While geopolitical uncertainty may keep volatility elevated in the near term, any signs of de-escalation could help restore investor confidence and support market recovery.
