The Pakistan Stock Exchange (PSX) plummeted by over 250 points on Monday, wiping out billions of rupees in market value, as oil prices surged and investors grew increasingly nervous about inflationary pressures.

Analysts pointed to a surge in oil prices, which had risen by more than 10% in the past week alone, as the main driver of the downturn. The move was seen as a significant blow to the country’s energy-starved economy.

The impact of the price rise on bond yields had also started to show, with investors becoming increasingly wary about lending money to the government at high interest rates. This led to a surge in borrowing costs, which further exacerbated the downturn.

One major concern among investors was that the oil price spike would lead to higher inflation, eroding the purchasing power of consumers and undermining economic growth. The PSX is heavily exposed to the fluctuations in oil prices, making it vulnerable to such shocks.

The decline on Monday came as a surprise to many, with some analysts warning about the potential risks of an economic slowdown. As investors took to the sidelines, hopes for a revival in the market dwindled further, leaving many wondering what would happen next.