PSX Plunges Over 2,800 Points as US-Iran Talks Delay Hits Sentiment

KARACHI: The Pakistan Stock Exchange came under sharp selling pressure on Friday as the benchmark KSE-100 index fell by more than 2,800 points in intraday trading, reversing a four-day rally and reflecting renewed anxiety over the future of US-Iran technical talks linked to the Islamabad peace framework.

The market had opened on a stronger note, briefly touching an intraday high of 182,185.87 points at 10:14am. However, momentum weakened soon after, and the index began sliding steadily from around 10:30am as investors moved to lock in gains and reduce exposure amid fresh diplomatic uncertainty.

By 12:03pm, the KSE-100 had dropped 2,858.75 points, or 1.58 percent, to stand at 178,539.46 against the previous close of 181,398.21. The fall marked a sudden change in direction after several sessions of gains that had been supported by easing geopolitical tensions and optimism over lower global oil prices.

Market analyst Awais Ashraf of AKD Securities said the postponement of planned US-Iran discussions in Geneva had unsettled investor confidence. Those talks were expected to begin technical work on the peace arrangement reached under the Islamabad MoU, making their delay a significant signal for markets already sensitive to regional developments.

The decline followed a period in which investors had responded positively to falling crude prices after the United States and Iran moved toward a preliminary understanding. For Pakistan, a net oil-importing economy, any easing in energy markets is closely watched because it can affect inflation, import payments, transport costs and pressure on foreign exchange reserves.

The latest reversal shows how strongly the PSX is now reacting to global diplomacy and regional security developments. Even though Pakistan’s domestic monetary policy environment had appeared relatively stable, uncertainty around the next phase of US-Iran negotiations quickly shifted market sentiment from optimism to caution.

The KSE-100’s recent gains had been built on expectations that calmer conditions in the Gulf and the reopening of key trade routes would reduce risk premiums for businesses and investors. The delay in Geneva discussions, however, raised questions over how smoothly the diplomatic process would move from symbolic agreement to practical implementation.

For Pakistan’s broader economy, the market fall matters beyond daily trading screens. A weaker stock market can affect investor confidence, corporate valuations, liquidity flows and perceptions of economic stability at a time when businesses are already assessing budget measures, energy costs and the outlook for external financing.

The coming sessions will be closely watched to see whether Friday’s drop becomes a short-term correction or the start of a deeper risk-off phase. Investors are likely to focus on fresh signals from Washington, Tehran and Islamabad, along with oil price movements, policy announcements and any confirmation of a new schedule for the postponed technical talks.