Oil Price Spike Pulls PSX Lower

The Pakistan Stock Exchange (PSX) ended Wednesday in the red after giving up early gains of more than 2,000 points. Rising oil prices reversed investor optimism, pushing the benchmark KSE-100 index down by 318.65 points to close at 155,858.47.

During the session, the market touched a high of 158,624.51 points before sliding to an intra-day low of 155,652.35 points. The reversal was triggered by a sudden spike in global crude prices following reports of a cargo vessel being struck in the Strait of Hormuz.

Brent futures rose to $88.39 per barrel, while US West Texas Intermediate (WTI) climbed to $84.43 per barrel, reigniting fears of higher energy costs. Analysts noted that oil prices had initially retreated after US President Donald Trump suggested the war may end soon, but the Hormuz incident quickly shifted sentiment.

Ahfaz Mustafa, CEO of Ismail Iqbal Securities, explained that the strike caused oil prices to jump over 2%, leading investors to reduce risk exposure. The market’s earlier rally had been fueled by falling oil prices, upbeat remittance data, and institutional interest in oversold stocks.

Arif Habib’s Ahsan Mehnti highlighted that remittances rose 5.2% year-on-year to $3.3 billion, while government assurances to renegotiate the IMF deal and secure crude supplies had supported bullish activity earlier in the day.

Global markets also reflected mixed signals. Chinese stocks closed higher, led by defensive and new energy sectors, while broader Asian shares bounced on oil price movements. The International Energy Agency’s plan to release oil reserves provided temporary relief, but contradictory signals from the Middle East left investors cautious about inflation and growth risks.

The PSX’s reversal underscores how geopolitical tensions and volatile oil prices remain key drivers of market sentiment. For investors, the session was a reminder of the delicate balance between optimism and caution in Pakistan’s financial markets.