KARACHI: Equities at the Pakistan Stock Exchange (PSX) fell sharply on Thursday, snapping a two-session recovery rally, as mounting geopolitical tensions and rising oil prices triggered panic selling.

The benchmark KSE-100 index plunged 5,405.48 points, or 3.41 per cent, to close at 152,907.97, wiping out more than Rs534 billion in market capitalisation in a single session.

The downturn followed fading optimism over a swift resolution to the Middle East crisis after Tehran rejected a reported 15-point proposal by Washington. The development pushed oil prices higher, raising concerns about the global economic outlook, including for Pakistan.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said market sentiment remained subdued throughout the session, weighed down by escalating tensions between the US and Iran. Both sides maintained rigid positions, demanding preconditions before any formal ceasefire, undermining ongoing diplomatic efforts involving regional stakeholders, including Pakistan.

He added that investor sentiment was further dampened by speculation over a potential increase in cut-off yields in the upcoming Pakistan Investment Bonds (PIB) auction. The expectations follow an upward adjustment in secondary market yields since the last auction, putting additional pressure on equity valuations.

On the corporate front, Oil and Gas Development Company Ltd (OGDCL) announced a gas discovery at the Sahito-1 well in Khairpur, Sindh. The well tested at 17.2 million cubic feet per day, with the company holding a 95pc working interest. The discovery is expected to add around Rs0.92 per share annually to earnings.

Index-heavy stocks, including United Bank Ltd, Fauji Fertiliser Company, Engro Holdings, Lucky Cement, Hub Power Company, Pakistan Petroleum Ltd, Habib Bank Ltd, Meezan Bank Ltd and National Bank of Pakistan collectively dragged the index down by 3,033 points.

Trading activity also weakened, with total volume declining 14.81pc to 521.63 million shares, while traded value fell 21.55pc to Rs27bn. K-Electric led the volume chart, with 96.7 million shares traded.

Topline Securities Ltd noted that the market remained under sustained selling pressure throughout the day, with the index largely trading in negative territory as investors stayed cautious amid volatile international oil prices and persistent global uncertainty.

Analysts expect developments in the Middle East to remain a key driver of near-term market sentiment, likely shaping the direction of the KSE-100 index in the days ahead.

Published in Dawn, March 27th, 2026