NEWS
Trump's roar shakes Pakistan's stock market, plunging by more than 5,000 points; investors panicked
Pakistan Stock Market: Trump's order to block Iranian ports had a significant impact on the Pakistan Stock Exchange (PSX) today. The benchmark KSE-100 fell by more than 5,000 points.
Trump's roar shakes Pakistan's stock market
Pakistan Stock Exchange: Following the failure of peace talks between the US and Iran in Islamabad, US President Donald Trump ordered a blockade of Iranian ports. This led to heavy fluctuations on the Pakistan Stock Exchange (PSX).
According to a report in Dawn, Pakistan's benchmark KSE-100 index fell sharply during trading on Monday. The KSE-100 fell more than 5,000 points in early trade, hitting an intraday low of 161,638.07 at around 9:50 a.m., compared to its previous close of 167,191.37. The index later recovered some of its losses, fluctuating around the 162,000 level, before rising above 163,000 and hitting an intraday high of 163,429.78 at around 11 a.m.
Why is there panic in the Pakistani stock market?
President Trump ordered a naval blockade of Iranian ports after marathon 21-hour talks in Islamabad failed to yield a ceasefire and Iran refused to give up its nuclear weapons. This has raised the specter of a renewed supply blockade at the Strait of Hormuz. This has rattled investors, impacting Asian markets like the Hang Seng and Nikkei.
How important is Hormuz for Pakistan?
Pakistan imports approximately 80-85% of its crude oil needs from Gulf countries such as Saudi Arabia, Kuwait, the United Arab Emirates, and Qatar. Furthermore, approximately 99% of Pakistan's LNG supplies also come from the UAE and Qatar. If the US naval blockade remains in place for a prolonged period, Pakistan's petroleum import bill could reach $3.5 billion to $5 billion.
If the international oil price rises by $10 per barrel, Pakistan's annual import bill could rise to $1.8-2 billion. This could increase domestic inflation by 15-17 percent. Pakistan also relies on imported oil and gas for its electricity needs. A supply disruption could halt operations in many industries and increase the duration of power outages.
