PSX edges lower as US-Iran war dents sentiment

• KSE-100 Index closed at 149,178.66, down 4,687.5 points, or 3.05%.
• Index hit intraday high of 153,943.69, up 77.53 points, or 0.05%.
• Index recorded a low of 148,747.72, down 5,118.44 points, or 3.33%.

The equity market was under pressure on Monday as the US-Iran war entered a third week without clear signs of de-escalation, while caution ahead of the Eid holidays kept investors risk-averse.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index settled at 149,178.66 points, down 4,687.5 points, or 3.05%, from the previous close of 153,866.16. 

The index traded between a high of 153,943.69, up 77.53 points, or 0.05%, and a low of 148,747.72, down 5,118.44 points, or 3.33%.

"Market sentiment remained negative as the US-Iran war entered its third week with no visible signs of de-escalation," said Huzaifa Riaz, Director, Mayari Securities (Pvt) Limited. 

"Going forward, the market is likely to take cues from geopolitical developments, and any indications of an off-ramp could boost positivity," he added.

Oil hovered around $100 a barrel while equities remained volatile as diplomats sought safe passage for tankers through the Strait of Hormuz. 

Brent rose as high as $106.50 before paring gains, while WTI hovered around $99, after US President Donald Trump said forces had struck military targets on Kharg Island.

He warned attacks could widen to energy infrastructure if Tehran interfered with shipping through Hormuz. Iran’s Fars news agency later reported that no oil infrastructure had been damaged.

Asian markets were mixed on energy-crisis concerns, with Tokyo, Shanghai, Sydney, Wellington, Taipei, Manila and Jakarta lower, while Hong Kong, Seoul, Singapore, Mumbai and Bangkok edged higher.

AKD Research said the PSX was likely to remain hostage to developments in the Middle East, warning that further escalation could sustain selling pressure, while any de-escalation could trigger a meaningful recovery. 

It said the recent correction had pushed the forward price-to-earnings ratio to 6.6 times, which it viewed as attractive.

Arif Habib Limited Research said the KSE-100 was trading at a price-to-earnings ratio of 7.7 times and offering a dividend yield of around 6.6%.

The benchmark lost 3,630 points, or 2.3%, over the week to close at 153,866 on Friday. In the previous session, the KSE-100 closed at 153,866.16, down 555.27 points, or 0.36%, from 154,421.43.