KSE-100 Drops 1,700 Points on US-Iran Talks Uncertainty

Pakistan's KSE-100 index dropped 1,742 points on Monday, closing at 172,196.70, a 1% decline from Friday's close of 173,939.01, as renewed uncertainty over Middle East conflict rattled investor sentiment. The selloff was sharp intraday: the index hit a session high of 174,523.76 before sliding to a low of 169,226.56, a swing of over 5,000 points, before partially recovering into the close. The immediate trigger is doubt over whether a second round of US-Iran talks, expected to be held in Islamabad, will proceed. The geopolitical risk channel here runs through oil prices and inflation: when Middle East tensions ease, falling oil prices reduce Pakistan's import bill and soften inflationary pressure, creating room for a looser monetary policy, the logic that drove a 4% weekly gain last week. Monday's reversal illustrates how fragile that trade is. The index still sits roughly 15,227 points below its January 23 all-time high of 189,166.83, and any breakdown in US-Iran diplomacy or oil price spike would put the recent recovery, built largely on rate-cut expectations, under significant stress.