Pakistan Stock Market Declines 1% Amid Fears of Escalating Global Tensions

Pakistan Stock Market Continues to Decline Amid Global Oil Price Surge

The KSE 30 index in Pakistan's stock market has fallen sharply, with a 1.4% intraday decline on March 11, extending losses to the third consecutive day. This brings the index's decline to 9% since the start of the US-Iran conflict, and a 3.5% drop for the week.

Key Factors Contributing to the Decline

Higher oil prices, which have surged above $100 per barrel due to the US-Israeli conflict with Iran, are a major concern for Pakistan's economy, which imports almost 80% of its oil needs. The country's import bill for oil stands at $10.71 billion between July 2025 and February 2026, with a monthly oil import bill estimated to rise to $600 million if crude oil prices remain high.

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Impact on the Economy

Pakistan's economy is already debt-stricken, and higher energy prices are exacerbating inflation concerns. The country's central bank has kept the key interest rates unchanged at 10.5%, while the government has increased petrol prices by 20%.

Technical Analysis

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. According to Anshul Jain, Head of Research at Lakshmishree Investment, the index is witnessing a technical rebound, but the move appears corrective rather than the start of a sustained recovery.

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Possible Future Scenarios

The index can retrace toward the 48,500–50,000 zone, where significant overhead supply from the recent breakdown is expected to emerge. If selling pressure persists, the index can head to 40,000 levels. 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.