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

The Pakistan Stock Exchange's KSE-100 index plunged 1,904.31 points, or 1.10 percent, on Tuesday, with the benchmark slipping to 171,731.76 points. According to Awais Ashraf, director of research at AKD Securities, the prolonged tensions between the United States and Iran are adversely affecting investor sentiment. Ashraf also pointed out that rising oil prices are exacerbating the pressure.

However, he noted that robust macroeconomic indicators and recent tapping of the international Eurobond market provide some respite to policymakers compared to previous shocks.

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

The Middle East situation and political uncertainty have undoubtedly impacted investor sentiment, leading to profit-taking across the board this week. Earlier on Monday, the stock market failed to maintain the mild recovery observed over the weekend, plummeting 1,692.74 points to close at 173,636.08 points.