KSE-100 slides nearly 2,000 points as political tensions weigh

The Pakistan Stock Exchange's benchmark KSE-100 index had fallen 1,876.97 points, or 1.12%, to 166,278.52 by 12:28pm on Monday, down from the previous close of 168,155.49, as renewed domestic political tension weighed on investor sentiment. The index earlier touched an intraday low of 166,167.79, a loss of 1,987.70 points or 1.18%, while its session high stood at 167,918.36.

Market participants linked the selling to heightened political anxiety after talks between the government and Pakistan Tehreek-e-Insaf collapsed without a breakthrough, with the party pressing ahead with its march towards Islamabad. Differences over counterterrorism policy and access to jailed PTI founder Imran Khan remained among the key sticking points, according to the reported accounts of the talks, deepening concerns over renewed political confrontation and possible disruption.

Selling was evident from the opening bell, with the index shedding more than 1,600 points in the opening minutes. By 9:43am it had fallen to 167,606.83, down 548.66 points or 0.33%, before losses accelerated as the session progressed, leaving the market volatile as investors weighed the domestic standoff against developments in international oil markets.

Crude prices fell on Monday as rising Middle East exports and a planned release of oil stocks by the G7 nations boosted supply prospects, offsetting concerns over further damage to Gulf oil infrastructure as the US-Israeli war on Iran continues. A softer oil price would ordinarily ease pressure on Pakistan's external account and inflation outlook, but it failed to offset the immediate hit to risk appetite from domestic uncertainty.

Trading activity remained brisk despite the fall. Volumes stood at 72.4 million shares by midday, with traded value reaching Rs4.55 billion.