In a dramatic reversal from Thursday’s blockbuster rally, the Pakistan Stock Exchange (PSX) came under intense selling pressure on Friday, with the benchmark KSE-100 Index shedding 3,714.57 points by close.

The index closed at 157,496.11 after losing 3,714.57 points (2.30%). This erased a significant chunk of the previous day’s explosive 5,433-point (3.49%) gain that had closed the market at 161,210.68. The market had earlier dropped nearly 4,000 points intraday.

Heavy selling swept across almost every major sector. Automobile assemblers, cement, commercial banks, fertilisers, oil & gas exploration companies, power generation, and refineries all traded deep in the red. Index-heavyweights including HUBCO, MARI, POL, PPL, MCB, MEBL, NBP, and UBL led the decline, dragging the market lower.

Analysts attribute the sharp sell-off to escalating global tensions rather than domestic fundamentals. The ongoing US-Israel conflict with Iran has sent oil prices soaring — Brent crude is now hovering near $83 per barrel after a weekly jump of over 15%, its biggest since 2022. Investors are now pricing in higher inflation risks and more hawkish monetary policy from major central banks. This has triggered a brutal rout in Asian markets: MSCI’s broadest Asia-Pacific index is down 6.6% for the week (worst since March 2020), Japan’s Nikkei is set for a 6.5% weekly loss, and South Korea’s Kospi has crashed 10.5% in its steepest weekly drop in six years.

The sudden shift from euphoria to panic selling highlights how vulnerable emerging markets like Pakistan remain to geopolitical shocks and global energy price spikes. While the KSE-100 had shown remarkable resilience earlier in the week, today’s decline serves as a stark reminder that external factors — particularly Middle East instability and rising crude oil costs — can quickly override local momentum.

This is a developing story. Investors are advised to monitor oil prices and global risk sentiment closely in the coming days.