Key Takeaways
- The Pakistan Stock Exchange's KSE-100 index dropped by over 4,800 points.
- US President Donald Trump stated that the memorandum of understanding with Iran is 'over'.
- Investor sentiment weakened amid heightened geopolitical uncertainty.
The Pakistan Stock Exchange (PSX) witnessed a significant decline in its benchmark KSE-100 index, dropping by over 4,800 points during intraday trade on Wednesday. The KSE-100 index fell to 181,391.19 points from the previous close of 186,255.55, marking a decline of 2.61 per cent by 2:34pm. This sharp drop followed US President Donald Trump's statement that the memorandum of understanding to end the war with Iran was 'over'.
Awais Ashraf, director of research at AKD Securities, noted that investor sentiment weakened following Trump’s comments, reigniting concerns over potential disruptions to oil supplies from the Middle East. He added that the market opened on a negative note amid heightened geopolitical uncertainty after US airstrikes on Iran in response to attacks on vessels transiting through the Strait of Hormuz.
Iran subsequently retaliated by hitting dozens of US military facilities in Bahrain and Kuwait, further exacerbating tensions. On Tuesday, PSX snapped a five-day bullish streak, falling by over 1,100 points as investors resorted to profit-taking following the market’s recent record-breaking rally. The KSE-100 index had reached an all-time high of 189,167 in January.
According to Topline Securities Ltd, yesterday's decline was driven by selling pressure emerging across key sectors during the latter half of the session. It noted that investor sentiment remained cautious amid weakness in regional equity markets, prompting participants to lock in recent gains after the KSE-100’s strong upward run over the past several sessions.
US President Donald Trump further stated on Wednesday at a NATO summit in Ankara that he did not want to engage with Tehran and described Iran as 'scum' and 'sick people'. He added, “To me, I think it's over. I don’t want to deal with them,” alongside NATO Secretary General Mark Rutte.
The interim ceasefire agreement signed between Washington and Tehran under the mediation of Pakistan was intended to provide a 60-day window for negotiations on a permanent agreement. However, indirect talks in Qatar ended without progress, leading to renewed US military strikes against Iran on Tuesday. The US also revoked a license allowing Iran to sell oil after three tankers were hit by projectiles in the Strait of Hormuz.
In revoking that license, the US gave Iran until July 17 to wind down any transactions. This move comes as part of ongoing disputes between the US and Iran, which have been further inflamed by recent military actions and diplomatic statements.
To me, I think it’s over. I don’t want to deal with them.
Donald Trump, US President
They’re scum. They’re sick people. They’re led by sick people.
Donald Trump, US President
