PSX falls as failed US-Iran talks jolt sentiment

Stocks at the bourse fell on Monday after US-Iran talks failed to secure a lasting breakthrough, while renewed Strait of Hormuz tensions drove oil back above $100 and kept investors on edge.

The Pakistan Stock Exchange's (PSX) benchmark KSE-100 Index traded between a high of 163,560.94, down 3,630.43 points or 2.17%, and a low of 161,638.07, down 5,553.3 points or 3.32%, against the previous close of 167,191.37.

"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," said AAH Soomro, an independent investment and economic analyst.

"Volatility is expected to continue this week until further progress is seen," he added.

Oil rose back above $100 a barrel after peace talks between the United States and Iran failed to produce a breakthrough and Washington moved to tighten pressure on Iran’s maritime trade. 

President Donald Trump said on Sunday the US Navy would begin blockading maritime traffic entering and exiting Iranian ports, raising fresh concern over the Strait of Hormuz and the durability of the Pakistan-mediated ceasefire.

The US Central Command said US forces would begin implementing the blockade of all maritime traffic entering and exiting Iranian ports from 10am ET (7pm, Pakistan standard time) on Monday.

Elsewhere in Asia, sentiment was mixed, with South Korea’s Kospi down 2% before trimming losses, while Japan’s Nikkei slipped 0.3%.

In the previous session, the KSE-100 rose 1,673.87 points, or 1.01%, to close at 167,191.37 from 165,517.51, trading between 168,290.29 and 166,221.33. The KSE-30 advanced 420.31 points, or 0.84%, to 50,589.37.