PSX declines as oil surge, inflation fears weigh on investor sentiment

KARACHI – Stocks at the Pakistan Stock Exchange came under significant pressure on Thursday as a sharp rise in global oil prices dampened investor confidence, while concerns over inflation and recent interest rate increases added to the bearish sentiment. The benchmark KSE-100 Index dropped sharply during intraday trading, touching a high of 164,357.47 — down 1,466.4 points — and a low of 161,461.09, marking a decline of 4,362.78 points from the previous close of 165,823.87. Market analysts attributed the downturn to global developments, particularly the spike in crude oil prices amid fears of a prolonged US blockade affecting Iranian ports. The situation intensified after Donald Trump indicated that restrictions could remain in place for an extended period, raising concerns over energy supply disruptions and inflationary pressures. Rising oil prices have heightened fears of increased import costs for Pakistan, potentially fueling domestic inflation and weakening economic stability. Analysts noted that the recent interest rate hike had already reduced equity valuations, and the added pressure from global energy markets further unsettled investors. The possibility of disruptions in the Strait of Hormuz — a key route for global oil shipments — pushed crude prices to multi-year highs, amplifying uncertainty in financial markets. Experts said investors were adopting a cautious approach, reassessing their positions amid growing economic risks and volatile global conditions. Meanwhile, international markets also showed weakness, with Asian equities largely trading lower as investors evaluated the global economic outlook and monetary policy direction in the United States. In the previous session, the KSE-100 Index had already recorded a significant decline, falling 2,588.35 points to close at 165,823.87, reflecting continued pressure on the market.