What happened
The Pakistan Stock Exchange’s benchmark KSE-100 Index fell 3,500.30 points, or 2.25 per cent, to close at 152,011.26 on Thursday, 2 April 2026, according to The News and Business Recorder. The index traded between an intraday high of 152,272.63 and a low of 150,022.43, down nearly 3.5 per cent at its weakest, against a previous close of 155,511.56.
The sell-off followed an address by United States President Donald Trump setting out plans to continue military operations against Iran, which disappointed investors who had hoped for clearer signals of an early end to the Middle East conflict. Oil prices rose on the remarks, with Brent climbing more than 4 per cent to as high as $105.55 a barrel and West Texas Intermediate rising 3 per cent to $103.16, The News reported.
Selling was broad. The News and Business Recorder reported declines in automobile assemblers, cement, commercial banks, oil and gas exploration companies, oil marketing companies and power generation, with index heavyweights including MARI, OGDC, POL, PPL, MCB, MEBL, NBP and UBL all trading lower.
Analyst AAH Soomro told The News: “Yesterday’s Trump statement to continue fighting for 2 to 3 weeks and Iran’s comments on no ceasefire have increased oil prices today by 5 to 7 per cent. That is dampening the mood.”
Domestic inflation added to the pressure. Business Recorder reported that consumer price index inflation climbed to 7.3 per cent year on year in March, which it said had shattered hopes of a near-term interest-rate cut by the State Bank of Pakistan ahead of its next policy meeting on 27 April.
Why it matters
The decline came a day after the KSE-100 surged 6,768.25 points, or 4.55 per cent, as investors bet on Middle East de-escalation, a rally that briefly triggered a market-wide circuit breaker when the KSE-30 index rose 5 per cent. Thursday’s session reversed a large part of that gain and showed how closely the Pakistani market is tracking war headlines and oil prices rather than domestic fundamentals.
The rupee was little changed, settling at 279.11 against the dollar, a gain of one paisa. Turnover fell, with all-share volume at 352.27 million shares against 670.87 million a day earlier and traded value at Rs19.51 billion against Rs43.98 billion. Of 481 companies traded, 99 rose and 323 fell.
What is still uncertain
Whether the index holds above the 150,000 level in the coming sessions depends on oil prices and on signals from Washington and Tehran, neither of which is under Islamabad’s control. The inflation reading also leaves open whether the central bank will keep its policy rate on hold at its 27 April meeting; the government raised Rs753 billion at a Treasury bill auction on Wednesday, with mixed yields, according to the State Bank of Pakistan.
Sources & reporting notes
This is a synthesis of published material, not eyewitness reporting. Sources were reviewed on 2026-04-03.
- The News — PSX drops on Middle East war escalation fears, oil spikePublished 2 April 2026 · KSE-100 close at 152,011.26, the 3,500.30-point fall, intraday range, oil prices, AAH Soomro quote, and the previous session's 6,768.25-point rally.
- Business Recorder — KSE-100 Index loses 2.25% amid geopolitical tensionsPublished 2 April 2026 · Sector and heavyweight movers, the "triple threat" framing, the 7.3 per cent March CPI reading and its implications for the State Bank, rupee close, turnover and market breadth.
