PSX dips 1,900 points during intraday trade as Middle East tensions weigh on investor sentiment

The Pakistan Stock Exchange's KSE-100 index experienced a significant drop of 1,904.31 points, or 1.10%, during intraday trading on Tuesday, as tensions between the United States and Iran continued to weigh on investor sentiment. The index closed at 171,731.76 points, down from its previous close of 173,636.07. Awais Ashraf, director of research at AKD Securities, explained that the "prolongation of tensions" and rising oil prices were contributing to the pressure.

However, he noted that "robust macroeconomic indicators, along with recent tapping of the international Eurobond market" provided some cushion for policymakers compared to previous shocks.

Recent attacks by the Houthis on Saudi Arabia's energy facilities have further heightened regional tensions, with global oil prices reaching multi-week highs. Brent crude futures surged by $2.00, or 2.06%, to $99.00 a barrel, while US West Texas Intermediate crude rose by $2.93, or 3.2%, to $94.41 a barrel. Brent crude had reached as high as $99.22, its highest level since July 24, and WTI had climbed to $94.60, its highest point since June 8.

The Middle East situation and political uncertainty have had a profound impact on investor sentiment, leading to profit-taking across all sectors this week. On Monday, the stock market failed to maintain the mild recovery observed over the weekend, with the KSE-100 index slipping by 1,692.74 points to close at 173,636.08.