PSX: Selling continues, KSE-100 sheds nearly 2,600 points

Selling continued on the Pakistan Stock Exchange (PSX) as geopolitical tensions escalated, resulting in the KSE-100 Index dropping over 1.5% during the early trading hours on Friday. At 9:50am, the benchmark index was at 166,273.27, down by 2,591.77 points or 1.53%. Negative trading was seen in sectors such as automobile assemblers, cement, commercial banks, oil and gas exploration companies, OMCs, and power generation.

Major index stocks like ARL, HUBCO, OGDC, PPL, POL, MARI, MCB, MEBL, NBP, and UBL traded in the red. On Thursday, the PSX experienced a significant drop when heightened concerns over inflation, the external account, and macroeconomic stability led to aggressive selling across the market. The benchmark KSE-100 Index fell 3,078.56 points, or 1.79%, to close at 168,865.04 points.

Globally, global bond yields spiked to new highs and stock markets sagged as soaring oil prices fueled inflation fears, prompting investors to anticipate more policy tightening from central banks worldwide. Brent crude rose to a four-month high of $109.97 a barrel amid a 6% overnight jump, marking a weekly gain of nearly 13%. Oil supplies stayed limited due to the Strait of Hormuz being blocked by the US and Iran's conflict, while the Houthi group took control of Yemen’s port of Mocha, posing a threat to Saudi oil exports in the Red Sea.

President Donald Trump's comments that the war might extend beyond the November midterm elections further worried markets, with global bond yields surging due to heightened inflation concerns. This caused Asian stocks to suffer heavy losses, with MSCI's Asia-Pacific index dropping 1.8% and Japan's Nikkei falling 2.8%. Chinese blue-chips declined by 1.2%, and Hong Kong's Hang Seng lost 1.5%.

Nasdaq futures decreased by 0.2%, while S&P 500 futures remained relatively unchanged. This report is an updated update on the current situation.