Selling pressure returned at the Pakistan Stock Exchange (PSX) amid escalation in the Gulf region, with the benchmark KSE-100 Index shedding nearly 3,000 points during intraday trading on Thursday.
At 11am, the benchmark index was hovering at 151,313.56, a decrease of 2,978.69 points or 1.93%.
The selling comes amid a global panic over an escalating energy crisis.
“Overnight, the conflict in the Gulf reached a dangerous new peak, after Israel struck Iran’s South Pars field, the world’s largest, Iran retaliated against Qatar’s Ras Laffan LNG hub,” said Behtari Capital on Thursday.
“Since Qatar is Pakistan’s primary gas supplier, this is a direct hit to our energy security,” it added.
Selling was observed in key sectors, including automobile assemblers, cement, commercial banks, fertiliser, oil and gas exploration companies, OMCs, power generation and refinery. Index-heavy stocks, including ARL, HUBCO, MARI, OGDC, POL, PPL, HBL, MCB, MEBL and NBP, traded in the red.
On Wednesday, PSX witnessed a strong bullish session with the benchmark index posting a sharp recovery amid improved investor sentiment, supported by easing international oil prices and renewed value hunting across key sectors. The KSE-100 Index closed at 154,292.26 points, registering a significant gain of 4,276.09 points or 2.85%.
Internationally, stocks slid, and oil prices rose sharply on Thursday after a major escalation in the U.S. and Israel’s war with Iran rattled investors, while the yen wobbled near the crucial 160 per dollar level as Japan’s central bank left interest rates unchanged.
As widely expected, the Bank of Japan left unchanged its short-term policy rate at 0.75% but joined the U.S. Federal Reserve and Bank of Canada in striking a cautious tone about the impact of rising oil costs from the conflict on inflation.
The broader market, though, remains focused on the war in the Middle East and is realising that the conflict is shaping up to be a prolonged one, stoking stagflation risk.
Iran accused Israel of striking its facilities in the huge South Pars gas field on Wednesday and retaliated by vowing attacks on oil and gas targets throughout the Gulf, firing missiles at Qatar and Saudi Arabia.
The hits to energy infrastructure sent U.S. crude futures about 1% higher to $97.07 per barrel. Natural gas rose more than 6%, while Brent futures rose to $112.19 a barrel, up 4.5% on the day.
In stocks, Japan’s Nikkei was down 2.5%, while South Korean equities fell 1.5%. MSCI’s broadest index of Asia-Pacific shares outside Japan fell more than 1.5%. European futures were down more than 1%.
