PSX falls nearly 1,000 points as Middle East conflict grows

The benchmark KSE-100 Index closed at 172,642.16 points, falling 993.91 points, or 0.57%, compared with the previous close of 173,636.07 points.

The decline reflected growing concerns among investors about the impact of the worsening regional situation on oil prices, economic conditions and market activity.

Trading remained weak for most of the session. The KSE-100 Index reached an intraday high of 173,736.19 points before falling to a low of 171,490.63 points.

The wide movement showed that investors remained cautious as developments in the Middle East continued to influence market expectations.

Rising oil prices put pressure on PSX

Analysts said higher energy prices were among the main reasons behind the weaker market sentiment.

AAH Soomro, an independent investment and economic analyst, linked the negative mood to rising oil prices amid growing tensions between Iran and the United States.

He also pointed to attacks by Yemen’s Houthis on Saudi Arabia’s energy infrastructure as another factor adding uncertainty to the market.

"Oil at $100 is keeping a lot of people unexcited and keeping fresh money away," he said.

The rise in crude prices is important for Pakistan because the country depends heavily on imported energy. A sustained increase in oil prices can raise import costs and put pressure on the country’s external account.

Higher fuel costs can also increase inflationary pressure and affect businesses that rely heavily on energy.

These concerns can make investors more careful about putting fresh money into stocks, particularly when geopolitical risks are rising.

Low trading volumes show investor caution

Ismail Iqbal Securities Chief Executive Officer Ahfaz Mustafa said the market was largely lacklustre during the session.

He said elevated oil prices had increased concerns among investors, while trading volumes remained below normal levels.

"With volumes substantially lower than usual, the market remains directionless," he said.

Low volumes often indicate that investors are waiting for greater clarity before making major decisions.

In the current situation, traders are closely watching developments in the Middle East and their possible effect on international oil prices.

The combination of weak volumes, higher crude prices and geopolitical uncertainty created a difficult environment for the PSX during the session.

Also Read: Houthi attacks hit Saudi energy sites, leaving 73 injured

Houthi attacks add to Middle East concerns

The pressure on global markets increased after Yemen’s Houthis launched attacks on several locations in southern Saudi Arabia.

The attacks reportedly targeted four cities and injured more than 70 people, while oil-related installations were also set ablaze.

The Houthis said they had carried out a broad operation deep inside Saudi territory.

According to reports, drones and missiles were used against a Saudi airbase in Khamis Mushair. Targets linked to Saudi Arabia’s state oil company were also hit in Abha, Najran and Jazan.

The attacks have added another layer of uncertainty to an already tense regional situation.

Saudi Arabia is one of the world’s major oil producers, making any threat to its energy infrastructure particularly important for global energy markets.

Investors therefore remain concerned that further attacks could disrupt supplies or push crude prices even higher.

Iran-US tensions keep oil markets nervous

The latest developments came after a period of relative calm in the Gulf during August.

Fighting has since resumed, with Iran and the United States exchanging fire, adding to fears of a wider regional escalation.

The renewed tensions have pushed international oil prices higher.

Brent crude prices gained more than 2% during the session and moved above $99 a barrel.

The possibility of oil reaching or moving beyond the $100 level has become a major concern for markets.

For countries that import large amounts of crude, expensive oil can increase the cost of transportation, electricity generation and industrial production.

For Pakistan, such pressure can have wider economic consequences because higher energy import bills can increase demand for foreign currency.