Karachi: The KSE-100 Index experienced a notable decline, dropping 1,200 points to close at 151,708, with trading volume reaching 421 million shares. The top performers in terms of price change included PGLC, PKGP, and LOTCHEM, while HCAR, SSGC, and GAL were the top decliners. Trading activity was predominantly focused in the Power, Technology, and Investment Companies sectors.

According to Taurus Securities Limited, the market downturn is part of a broader financial reaction to escalating geopolitical tensions in the Middle East. The region is witnessing heightened conflict, with Iran and the United States expressing contrasting positions, and Israel targeting Iranian nuclear sites. These developments have led to increased foreign outflows from Pakistani bonds and equities as investors react to the rising geopolitical risks.

Additionally, the government has received approval from the International Monetary Fund (IMF) for a $1.2 billion loan, following fresh assurances on fiscal discipline. Meanwhile, the ongoing conflict in the Middle East has raised concerns about a potential hike in interest rates and a widening current account deficit, which could reach 5 percent of GDP. The government is also implementing a plan to mitigate the impact of rising oil prices through a Rs125 billion allocation.

In response to these challenges, Pakistan has eased trade rules with Iran and is working on a hybrid plan to address the power crisis. The government is also targeting offshore wealth repatriation amid global tensions, and the introduction of a new grid model by NGC in July is anticipated as part of efforts to stabilize the energy sector.