The Pakistan Stock Exchange (PSX) came under heavy selling pressure on Wednesday as fresh attacks in the Middle East ended the relative calm of recent days in the US-Iran conflict, stoking fears over energy supply routes.
According to the PSX website, trading opened on a bearish note, with the benchmark KSE-100 Index shedding over 1,600 points in the first few minutes. The decline deepened as the session progressed, with losses exceeding 1,900 points at one stage.
Selling was broad-based, hitting automobile assemblers, cement, chemicals, commercial banks, oil and gas exploration companies, oil marketing companies (OMCs) and power generation stocks.
The index closed at 176,042.98, down by 1,580.90 or 0.89% from the previous close.
The fall followed a weaker close on Tuesday, when the PSX slipped as investors booked profits after Monday’s sharp rally, wiping out early gains despite strong buying interest in refinery stocks on reports of policy support for the sector. The KSE-100 Index had settled 638.45 points, or 0.36%, lower at 177,623.88 points that day.
The renewed pressure came after the United States and Saudi Arabia launched strikes on Iran-backed groups in Iraq on Wednesday, blaming them for drone attacks on Saudi oil facilities, prompting Iran to warn that pinning the attacks on it was a “major miscalculation.” The strikes followed the U.S. military’s announcement hours earlier that it had averted a surprise Iranian missile attack on American troops in the region.
Shipping traffic through the Strait of Hormuz remained thin, with just five commodity ships passing through on Tuesday.
Oil prices surged in response, with Brent futures rising $2.70, or 3.2%, to $86.79 a barrel by 0645 GMT, while U.S. West Texas Intermediate (WTI) crude climbed $2.65, or 3.3%, to $81.91 a barrel.
The local selloff mirrored a broader rout across Asian markets, where anxiety over AI valuations and doubts about whether heavy technology spending will generate returns rattled investors ahead of major tech earnings and a U.S. Federal Reserve policy decision.
South Korea’s KOSPI, which had more than tripled over the 12 months to June, sank over 11% to its lowest level since early April, after falling more than 10% on Tuesday.
Taiwan stocks dropped 5%, while Japan’s Nikkei slid 2.6%. MSCI’s broadest index of Asia-Pacific shares outside Japan fell more than 2.45%, extending a 3.6% decline from the previous session.
Asian chipmakers, at the centre of this year’s AI-driven rally, bore the brunt of the selling. Shares of SK Hynix fell 9% even after the company reported quarterly operating profit up more than sixfold, as the results fell short of elevated market expectations
