Pakistan stocks tumble over 2,800 points amid uncertainty over US-Iran talks

The Pakistan Stock Exchange (PSX) experienced a significant downturn, with its benchmark KSE-100 index tumbling by over 2,800 points during intraday trade. This sharp decline halted a four-day gaining streak that had been fueled by optimism surrounding the 'Islamabad MoU' between the United States and Iran. The agreement had initially triggered buying interest across various sectors.

On Friday, the market initially showed positive momentum, pushing the KSE-100 index to an intraday high of 182,185.87 points. However, the trend reversed around 10:30 am, with the index steadily declining. By 12:03 pm, the KSE-100 index had fallen by 2,858.75 points, or 1.58 percent, to 178,539.46, from its previous close of 181,398.21.

The market's downward spiral was directly linked to the postponement of planned US-Iran talks in Geneva. These discussions were considered a crucial step in the peace framework established by the Islamabad MoU. Awais Ashraf, director of research at AKD Securities, pointed to Israeli strikes on Lebanon, which occurred after the peace deal was signed, as a significant factor that "shaken investor confidence."

This market reaction defied the expectations of many analysts, who had anticipated that the positive momentum would continue. They had predicted that easing geopolitical tensions and a stable monetary policy would support the market's upward trend. The sudden reversal highlights the market's sensitivity to geopolitical developments and the fragility of investor sentiment.

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Israeli strikes on Lebanon after the signing of the peace deal between the US and Iran [have] shaken investor confidence.