The Pakistan Stock Exchange (PSX) came under significant pressure on Thursday as rising global oil prices and concerns over monetary tightening dampened investor sentiment.
Read More: Oil prices hit four-year high amid Hormuz tensions
The benchmark KSE-100 Index experienced sharp volatility during the trading session, hitting an intraday high of 164,357.47 points before sliding to a low of 161,461.09 points. This represented a decline of 4,362.78 points, or 2.63%, compared to the previous close of 165,823.87.
Market analysts linked the downturn to a combination of global and domestic factors, including a surge in crude oil prices and the impact of recent interest rate adjustments, both of which have raised concerns over inflation and corporate earnings.
The decline in equities followed a sharp rise in international oil prices, driven by fears of a prolonged disruption in Iranian port operations and potential military escalation in the region. Reports suggesting extended maritime restrictions in the Strait of Hormuz further added to global market uncertainty.
Brent crude for June delivery surged to its highest level in years before easing slightly, while US West Texas Intermediate also recorded strong gains. The volatility in energy markets has raised concerns about import costs for oil-dependent economies like Pakistan.
Analysts said higher global oil prices are expected to increase domestic inflationary pressures, which could affect monetary policy decisions and reduce investor appetite for equities.
Market experts also pointed to the recent interest rate hike as another factor weighing on the stock market. Higher borrowing costs tend to reduce corporate profitability and lead to valuation adjustments in equity markets.
Investors adopted a cautious stance, reassessing risks amid uncertain global economic conditions and fluctuating energy prices. Trading activity reflected a broader “wait and see” approach as participants evaluated the impact of external shocks on Pakistan’s economy.
Global equity markets also showed weakness, with most Asian indices trading lower amid concerns over oil prices and monetary policy outlooks in major economies.
Read More: PSX surges as oil prices fall
Despite occasional rebounds in recent sessions, the PSX remains sensitive to external economic developments, particularly movements in global crude oil prices and changes in interest rate expectations.