KARACHI: Escalation in US military attacks and Iranian retaliation pushed oil prices higher, fuelling global economic uncertainty, especially in Pakistan, which relies on energy imports via the Strait of Hormuz, triggering panic-selling that dragged the benchmark index below the 175,000 barrier as hopes dimmed for any end to the conflict, exerting cost pressures amid an upsurge in inflation.

Topline Securities Ltd said the KSE-100 index closed at 174,776.60, down 1,690.40 points or 0.96 per cent, after trading between an intraday high of 175,841 and a low of 174,562.

The market remained under pressure throughout the session, as renewed geopolitical tensions, coupled with a sharp increase in international oil prices, weighed on investor sentiment and triggered cautious trading across the broader market.

On the negative side, Meezan Bank, United Bank, Pakistan Petroleum, Fauji Fertiliser, and Lucky Cement collectively dragged the index down by approximately 604 points. Conversely, Engro Fertiliser, Thal Ltd, and Askari Bank provided some support, collectively adding approximately 139 points.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said PSX sentiment remained bearish as investor sentiment stayed weak amid the resumption of US-Iran fighting, with both sides exchanging strikes across the region.

On the macro front, Pakistan plans to raise $2bn via a Eurobond to repay bilateral loans to Saudi Arabia or China.

Investor participation remained subdued as trading volume fell 22.21pc to 610 million shares and turnover value dipped 14.83pc to Rs31.8 billion.

Analysts expect targeted profit-taking and stock-specific fluctuations during the ongoing earnings season, with geopolitical events and oil prices continuing to be major market influences.

Published in Dawn, September 3rd, 2026