The Pakistan Stock Exchange opened the trading week sharply lower, with the benchmark KSE-100 index shedding more than 2,300 points as escalating hostilities between the United States and Iran rattled investor confidence. The decline, which deepened during the session, reflected a broad move away from risk assets amid fresh strikes that disrupted shipping through the Strait of Hormuz and pushed global oil prices higher. Main Developments The KSE-100 index touched an intraday low of 179,448.52 points shortly after opening, down 2,793.25 points from Friday’s close of 182,241.77. It partially recovered to a high of 181,148.26 points by 2:30pm but ultimately closed at 179,927.04 points, a net loss of 2,314.73 points or 1.27 percent. Trading volume fell to 845 million shares, with total value at Rs35.5 billion. CNERGY led activity, with 158 million shares changing hands. Analysts at Topline Securities attributed the sell-off to “reignited concerns over a broader regional conflict” and said profit-taking after the market’s recent rally compounded the pressure. Read also: Why the Strait of Hormuz Crisis Spikes Oil Prices Again Background The renewed fighting between the US and Iran has reduced traffic through the Strait of Hormuz to a five-week low, according to AKD Securities director Awais Ashraf. The strait is a critical chokepoint for global oil shipments, and the disruption has cast doubt on the interim peace agreement signed last month between the two countries. On Friday, the PSX had managed to reverse a three-session losing streak as value-hunters stepped in. That recovery was short-lived, however, as fresh hostilities over the weekend erased gains and reignited fears of a broader conflict that could further destabilize energy markets. Why It Matters For Pakistan, a net oil importer, rising crude prices directly fuel inflationary pressure and widen the current account deficit. The Strait of Hormuz disruption threatens to push global oil prices higher for longer, complicating the central bank’s efforts to stabilize the economy. The sell-off also signals that geopolitical risk remains the dominant driver of market sentiment, overshadowing what Topline described as an “otherwise supportive macroeconomic backdrop.” What's Next Investors will watch for further developments in US-Iran negotiations and any escalation in military activity near the Strait of Hormuz. The refinery sector, which held up relatively well on expectations of an upcoming refinery policy aimed at upgrades and expansions, may provide a partial buffer if the policy is announced soon. Broader market direction will likely hinge on whether the interim peace agreement can be salvaged or whether hostilities intensify further.