Pakistan stock market: The latest conflict in the Middle East, which is showing no signs of abating and keeping the crude oil prices elevated, is wreaking havoc in the Pakistan stock market, driving the worst intraday declines for its benchmark indices — KSE 30 index during this month.
The KSE 30 index crashed as much as 1.4% to hit the low of 46,647.30 today, extending losses to the third day in a row and on track to end in the red in four of the five sessions this week.
Pakistan stock market’s KSE 30 index had slumped 6.90% on Monday — its second-worst intraday fall. On March 2, the index had declined 10%, triggering a trading halt and also recording its worst-ever single-day decline.
So far this week, the index is down 3.5%, while for the month, the index has lost 9% since the start of the US-Iran war.
Why is the Pakistan stock market falling?
Like India, oil also forms a major part of Pakistan’s import bill, and higher energy prices are weighing on its already debt-stricken economy. This is also pressuring their stock market, raising inflation concerns.
As the country imports most of its oil from the Gulf states, a prolonged surge in crude prices could quickly widen the import bill and fuel inflation in an economy still dependent on IMF financing, Shankar Talreja, an analyst at brokerage firm Topline Securities, told Bloomberg earlier in the week.
According to a report in Al Jazeera, Pakistan imports almost 80% of its oil needs. It further stated that between July 2025 and February 2026, its oil imports stood at $10.71 billion, while the calendar year total in 2024 was above $15 billion.
Various new websites earlier this month reported that the Pakistan government said that the monthly oil import bill could rise to $600 million if crude oil prices remain high.
Oil prices have spiked to above $100 per barrel following the US-Israeli conflict with Iran, resulting in the closure of the Strait of Hormuz — a key passageway through which 25% of the world’s oil passes.
The International Energy Agency warned on Thursday that the supply disruption is the largest in the history of the global oil market, a day after its members agreed to a historic release of emergency reserves to try to cool prices.
Pakistan has already announced a 20% increase in petrol prices, passing on the impact of higher oil prices to consumers. Meanwhile, its central bank has kept the key interest rates unchanged at 10.5%, as per Reuters, on Monday.
Additionally, the country is also caught in a tussle of its own with its neighbour, Afghanistan.
Pakistan and Afghanistan have been targeting each other’s military installations since late February, when Kabul said it struck Pakistani posts in response to Pakistani attacks along the border.
Both sides have claimed to inflict heavy losses in what has become their deadliest fighting in years, a confrontation Islamabad has described as an “open war ” with Afghanistan, as per an AP report.
Can Pakistan stock market fall more?
Technically, the KSE-30 index has corrected sharply by nearly 25% in just 29 days, reflecting aggressive liquidation and a clear break in short-term structure, said Anshul Jain, Head of Research at Lakshmishree Investment.
“The index is now witnessing a technical rebound, but the move appears corrective rather than the start of a sustained recovery. Price is likely to retrace toward the 48,500–50,000 zone, where significant overhead supply from the recent breakdown is expected to emerge,” he opined.
The index, which is now at 44,120 levels, can even head to 40,000 if selling pressure persists.
From a structural perspective, the index may eventually resume its decline and move toward the 40,000 zone in the coming weeks if selling pressure re-emerges, Jain said.
(With inputs from agencies)
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