KARACHI: The Pakistan Stock Exchange (PSX) staged a strong recovery on Tuesday, gaining more than 2,000 points after suffering its steepest single-day decline, triggered by escalating tensions in the Middle East.
The benchmark KSE-100 Index surged to an intraday high of 156,106.01, up 4,133.02 points, or 2.72%, from the previous close of 151,972.99. It later pared gains to touch a low of 151,258.85, down 714.14 points, or 0.47%.
The rebound followed Monday’s historic plunge, when the index closed at 151,972.99, shedding 16,089.17 points, or 9.57% — the largest one-day fall in its history.
Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company, said the market was rebounding after a significant correction a day earlier.
Topline Securities’ Maaz Mulla observed that after Monday’s panic-driven slide — largely attributed to mutual fund selling — a technical pullback was expected. He noted that Tuesday’s gains reflected value buying as excessive pressure eased, adding that the sustainability of the recovery would depend on follow-through in coming sessions.
Globally, markets remained under pressure as investors assessed the economic impact of US and Israeli strikes on Iran. A broad selloff in equities continued, while the US dollar strengthened amid rising geopolitical uncertainty.
MSCI’s broadest index of Asia-Pacific shares outside Japan declined 1.5% for a second consecutive session. South Korean equities dropped as much as 4.1%, Tokyo’s Nikkei 225 fell 2.3%, and S&P 500 e-mini futures were down 0.6%.
Analysts said heightened geopolitical risks could exacerbate already elevated economic policy uncertainty. The situation drew comparisons to 2022 during the Russia-Ukraine conflict, when Asian markets faced sustained pressure.
Meanwhile, US President Donald Trump defended the ongoing campaign against Iran, stating that operations were progressing ahead of expectations.
An official of Iran’s Revolutionary Guards claimed that the Strait of Hormuz had been closed to marine traffic, warning that any vessel attempting to pass would be targeted. The development sent shockwaves through energy markets.
Shipping costs for supertankers transporting oil from the Middle East to China reportedly surged to a record high of over $400,000 per day. Brent crude futures extended gains by 2% to $79.22 per barrel on Tuesday, after sharp increases a day earlier. European benchmark gas prices and Asian LNG rates had jumped by around 40% in the previous session.
Market observers said continued volatility in global energy prices and geopolitical developments would likely influence investor sentiment at the PSX in the coming days.