PSX Drops as US-Iran Tensions Push Oil Above $100

Following the failure of US-Iran negotiations to produce a long-term resolution, stocks on the market sank on Monday. Meanwhile, fresh tensions in the Strait of Hormuz pushed oil back above $100 and left investors on edge.

In comparison to the previous close of 167,191.37, the benchmark KSE-100 Index of the Pakistan Stock Exchange (PSX) fluctuated between a high of 163,429.78, down 3,761.59 points or 2.25%, and a low of 161,638.07, down 5,553.3 points or 3.32%.

“Investors are naturally disappointed by the talks’ inability to secure a long-term ceasefire. US statements on blocking the Strait of Hormuz have further increased upside risk in oil, with international prices rising by $6 to $7 a barrel back into the $100-plus range,” AAH Soomro, an independent economic and investment analyst, stated.

“Volatility is expected to continue this week until further progress is seen,” he continued.

Following the failure of peace negotiations between the United States and Iran and Washington’s decision to increase pressure on Iran’s maritime trade, oil prices surged again above $100 per barrel.

President Donald Trump raised new concerns about the Strait of Hormuz and the sustainability of the truce mediated by Pakistan on Sunday when he announced that the US Navy will start blocking marine commerce entering and leaving Iranian ports.

According to the US Central Command, US forces would start enforcing the blockade of all marine trade entering and leaving Iranian ports on Monday at 10 a.m. ET (7 p.m. Pakistan Standard Time).

Sentiment was mixed elsewhere in Asia, with Japan’s Nikkei down 0.3% and South Korea’s Kospi falling 2% before reducing losses.

The KSE-100 traded between 168,290.29 and 166,221.33 during the previous session, rising 1,673.87 points, or 1.01%, to close at 167,191.37 from 165,517.51. At 50,589.37, the KSE-30 gained 420.31 points, or 0.84%.