PSX: Stocks shed nearly 1,300 points in early trade

The Pakistan Stock Exchange (PSX) experienced a sharp decline in early trading, with the benchmark KSE-100 Index falling nearly 1,300 points. This was driven by concerns over potential supply disruptions following the US and Iran's exchange of strikes overnight. By 10am, the index had dropped to 175,193.34, representing a decrease of 1,273.65 points or 0.72% from its previous level.

The selling was particularly pronounced in sectors such as automobile assemblers, cement, commercial banks, oil and gas exploration, OMCs, and power generation. Index-linked stocks like HUBCO, MARI, OGDC, PPL, HBL, MCB, MEBL, and NBP all traded in the red. The previous day's uncertainty surrounding the US-Iran conflict and fluctuations in global oil prices had already kept investors cautious at the PSX, with heavy selling outweighing gains in some technology and energy counters.

As of Tuesday, the KSE-100 Index closed at 176,466.99, down 508.69 points or 0.29%. Globally, stocks faced a slump in Asian trading due to the US's renewed attacks on Iran, which led to higher oil prices and a bond market-induced selloff. MSCI's Asia-Pacific index outside Japan dropped 1.5%, with South Korea's KOSPI falling over 3% and the Nikkei 225 down 2.6%.

U.S. stock indices also saw declines, with the S&P 500 e-mini futures falling 0.1%. On Wall Street, the S&P 500 slipped 0.7%, and the Nasdaq Composite fell 1%, as higher government bond yields impacted equities. The decline occurred amid a report from the Institute for Supply Management indicating a slowdown in U.S. manufacturing activity in August, while still remaining in an expansionary phase.

Traders anticipate that the Federal Reserve may raise interest rates at its upcoming meeting in two weeks, though an increase is not guaranteed, with Fed funds futures suggesting a 67% probability of a 25-basis-point hike at the Fed's meeting on September 16.