The capital market expanded its decline on Wednesday, as investors remained careful amid regional tensions and economic uncertainty.
The Pakistani Stock Exchange (PSX) reference index reached a low 120,863.21, reflecting a drop of 1,107.83 points or -0.84%and rose to a high 121.905.49, dropping 65.55 points, or -0.0.05%.
“The market is likely to remain unstable for two weeks until clearly in the regional tensions between Iran and Israel and its possible effect on Pakistan’s geopolitical alignment,” said independent investment and economic analyst AAH Soomro.
“Also, further rise in oil prices in the 1980s or beyond the impact on the narrow Hormuz will essentially affect Pakistan’s and inflation’s financial perspectives,” he added.
Oil prices rose by 2% on Tuesday, after US President Donald Trump let the G7 abruptly monitor the conflict and called on Tehran residents to evacuate.
From the initial increase in Friday oil, oil prices range between profits and losses. However, profits were mitigated after the International Energy Agency told the 2025 report that world demand would be slightly reduced in 2030 for the first time since the start of the Covid pandemic in 2020.
On Monday, the Pakistani State Bank (SBP) maintained its key interest rate unchanged at 11%, reporting increased risks to inflation driven by geopolitical instability.
In its statement after the MPC, the Central Bank warned that Iran-Israel’s conflict could weigh the Pakistani outdoor sector and inflation prospects. While imports are increasing in accordance with the recovery of domestic demand, exports have slowed under global trade pressure.
The wider conflict continues to escalate. Despite international invitations for restraint, both Israel and Iran have maintained missile strikes since Friday, when Israel is targeting Iranian nuclear and military infrastructure.
On Tuesday, the KSE-100 index had closed 254.32 points, or 0.21%, at 121,971.04. The index recorded a high 122,891.61 and a low 121,815.39 during the meeting.
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