PSX drops more than 2,800 points as delay in US-Iran talks rattles investors

ISLAMABAD: The Pakistan Stock Exchange came under heavy selling pressure on Friday, with the benchmark KSE-100 index falling more than 2,800 points in intraday trade after uncertainty emerged over planned talks between the United States and Iran.

The index had opened on a firm note and climbed to an intraday high of 182,185.87 points at 10:14am. But the market reversed course shortly afterwards and moved lower almost continuously from around 10:30am. By 12:03pm, the KSE-100 was down 2,858.75 points, or 1.58 per cent, at 178,539.46, compared with the previous close of 181,398.21.

The decline ended a four-session recovery in the market. That earlier rally had been supported by lower oil prices and investor optimism after the signing of the Islamabad MoU between Washington and Tehran, which had prompted buying across several sectors. Friday’s slide followed the postponement of the planned US-Iran meeting in Geneva, which had been viewed as an important next step in the peace framework set out under the agreement.

Awais Ashraf, director of research at AKD Securities, linked the market’s weakness to fresh regional tensions after the deal. He said investor sentiment had been hit by developments in Lebanon. “Israeli strikes on Lebanon after the signing of the peace deal between the US and Iran [have] shaken investor confidence”.

The move ran counter to earlier expectations among analysts, who had anticipated that the market would hold on to its positive momentum on the back of easing geopolitical tensions and a stable monetary policy environment.