Brandon King injured after brilliant Babar Azam run-out

KARACHI: Selling pressure intensified at the Pakistan Stock Exchange (PSX) on Tuesday as investor sentiment weakened amid growing uncertainty over the prospects of a peace agreement between the United States and Iran and the reopening of the strategically important Strait of Hormuz. The benchmark KSE-100 Index came under pressure during the trading session, losing more than 1,300 points as investors remained cautious and reduced exposure to major stocks across several sectors. At around 2pm, the KSE-100 Index stood at 179,996.62 points, showing a decline of 1,313.66 points, or 0.72%, from the previous close. The market witnessed broad-based selling, with several major sectors contributing to the decline. Automobile assemblers, cement companies, commercial banks, fertiliser manufacturers, oil and gas exploration firms and oil marketing companies (OMCs) remained under pressure. Several index-heavy stocks also traded in negative territory. Prominent companies including HUBCO, Mari Petroleum (MARI), Oil and Gas Development Company (OGDC), Fauji Fertilizer Company (FFC), Habib Bank Limited (HBL), MCB Bank, Meezan Bank (MEBL) and United Bank Limited (UBL) were among the stocks weighing on the benchmark index. Previous session also ends lower The latest decline follows a weak close in the previous trading session. On Monday, the PSX initially moved higher but lost momentum during the second half of the session as investors opted to book profits in heavyweight shares. The KSE-100 Index eventually closed at 181,310.28 points, down 119.74 points, or 0.07%. The continued weakness suggests that investors are closely monitoring developments in international markets, particularly the situation surrounding oil supplies and the Strait of Hormuz. US-Iran tensions keep markets on edge Global financial markets remained unsettled on Tuesday as hopes for an agreement between Washington and Tehran appeared to fade. Negotiations aimed at ending the conflict and restoring normal shipping through the Strait of Hormuz have encountered fresh difficulties. US President Donald Trump on Monday responded to Iran’s conditions for a possible peace agreement by putting forward his own demands, including calls for compensation related to deaths and losses associated with wars, attacks and protests. The tougher rhetoric has raised concerns that diplomatic efforts could take longer, potentially prolonging disruptions around the crucial maritime route. The Strait of Hormuz is one of the world’s most important energy corridors, and prolonged disruption to shipping through the waterway could have significant consequences for crude oil supplies and global energy prices. Oil prices climb to highest level since July 31 The uncertainty surrounding the situation was reflected in international oil markets. Brent crude futures climbed to around $88 per barrel, while US West Texas Intermediate crude futures rose to approximately $82.45 per barrel. Both benchmarks reached their highest levels since July 31 after recording gains of roughly 5% during Monday’s trading session. Higher oil prices are a major concern for economies that depend heavily on imported energy. For Pakistan, sustained increases in global crude prices could increase the country’s import bill and place additional pressure on external accounts, inflation and domestic fuel prices. The rise in energy prices is also being closely watched by investors because higher input costs can affect corporate profitability and influence monetary policy expectations. Asian markets remain cautious The uncertainty was not limited to Pakistan. Asian equity markets moved within a narrow range as investors assessed the potential impact of rising energy prices on inflation and economic growth. MSCI’s broadest index of Asia-Pacific shares outside Japan moved between gains and losses before trading modestly higher. South Korea’s Kospi also recorded a slight increase. However, the escalation in tensions around the Gulf kept overall market sentiment fragile, with investors remaining wary of further developments that could affect energy supplies and global trade. US stock futures were also slightly positive on Tuesday. Nasdaq futures rose around 0.28%, while S&P 500 futures gained approximately 0.1%, following a weaker session on Wall Street on Monday. Inflation data in focus Investors are also awaiting the latest US consumer price data, which could provide further clues about the direction of interest rates and inflationary pressures in the world’s largest economy. The increase in crude oil prices has added another element of uncertainty ahead of the inflation report. A sustained rise in fuel and energy costs could complicate efforts to bring inflation closer to central-bank targets. For Pakistani investors, the combination of geopolitical uncertainty, higher global oil prices and pressure on heavyweight shares is likely to remain a key factor influencing trading sentiment in the near term.

Pakistan’s total government debt stock climbed to a record level of nearly Rs84 trillion by the end of June 2026, highlighting the growing financial burden facing the country amid continued reliance on domestic and external borrowing. According to the latest data released by the State Bank of Pakistan (SBP), the federal government’s total debt increased by 7.4% on a year-on-year basis during the fiscal year ended June 2026. The central government’s debt stood at Rs83,642 billion in June 2026, compared with Rs77,888 billion recorded in June 2025. The debt stock also increased significantly on a monthly basis, rising from Rs81,955 billion in May 2026. The latest figures indicate that the government’s debt increased by around Rs5,754 billion, or Rs5.75 trillion, over the course of the fiscal year. Domestic debt remains major component Domestic borrowing accounted for the largest portion of the government’s total debt. According to SBP data, the federal government’s domestic debt rose by 9.1% year-on-year to Rs59,441 billion by June 2026. The increase reflects continued dependence on the domestic financial market to meet the government’s financing requirements, including budgetary needs and debt-servicing obligations. Meanwhile, the federal government’s external debt increased by 3.3% during the year, reaching Rs24,201 billion by June 2026. Although the growth in external debt remained comparatively lower than domestic borrowing, the foreign-currency component continues to place pressure on the country’s external financing position, particularly when debt repayments coincide with periods of weak foreign exchange inflows. Debt servicing poses growing challenge The continued rise in the debt stock is also raising concerns about the government’s ability to manage debt-servicing costs while creating fiscal space for development spending and public services. A growing share of government revenues is required to meet interest and principal repayment obligations, limiting the resources available for infrastructure, social development and other productive investments. Economic experts have warned that if the debt trajectory is not brought under control, the rising burden could turn into a “debt trap” for the economy. They argue that reducing dependence on borrowing would require stronger revenue mobilisation, greater fiscal discipline, higher exports and sustained economic growth. Improving the efficiency of public spending and reducing reliance on debt-financed expenditures could also help contain the pressure.