The Pakistan Stock Exchange (PSX) witnessed a volatile session on Monday with the benchmark KSE-100 Index closing sharply lower at 172,196 points, shedding 1,742 points (-1% day-on-day) as escalating geopolitical tensions dampened investor sentiment.

Market participants remained cautious following rising friction between the United States and Iran over a reported blockade, which Tehran termed illegal. The uncertainty kept regional risk appetite subdued and triggered volatility across financial markets, according to KTrade.

In the energy space, Brent Crude Oil opened firm near $97–98 per barrel before easing to around $95–96, contributing to a weak start at the exchange.

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Early losses in the session were partially recovered but lacked sustained momentum. Selling pressure remained concentrated in fertilisers, cement, and banking stocks. Major index drags included Fauji Fertiliser Company (FFC), Habib Bank Limited (HBL), Hub Power Company (HUBC), Lucky Cement (LUCK), and Engro Holdings (ENGROH).

On the flip side, limited support came from United Bank Limited (UBL), National Bank of Pakistan (NBP), and Bank Alfalah (BAFL).

Trading activity remained robust, with volumes in the benchmark reaching approximately 597 million shares. Key volume leaders included Bank of Punjab, with 120 million shares, K-Electric with 85 million shares, and Pak Elektron Limited with 58 million shares.

Looking ahead, market direction is expected to remain highly sensitive to geopolitical developments, particularly with reports of an upcoming Iranian delegation visit to Pakistan. Oil price trends and evolving US-Iran relations will continue to guide investor sentiment, keeping a cautious outlook in the near term.