KSE-100 Falls 339 Points as Trump's Hormuz Rejection Sends Oil Higher

The Pakistan Stock Exchange's benchmark KSE-100 index closed at 170,425.62 on September 28, down 339.60 points, or 0.20 percent, from the previous session's close of 170,765.22, as a fresh spike in international oil prices pulled sentiment lower across the board.

How the session played out

Trading was volatile through the day. The index touched an intraday high of 171,126.52 before sliding to a low of 170,120.49 — a swing of more than 1,000 points — before settling near the bottom of that range at the close. The move erased the ground gained earlier this month, when the KSE-100 was riding a bullish run that carried it past 171,600 points on September 22. Monday's close leaves the index roughly 1,200 points below that mark.

What pushed oil prices up

The trigger was overseas, not domestic. Brent crude climbed above $106 a barrel on September 28 — up sharply on the session and roughly 18 percent higher over the past month — after President Trump confirmed over the weekend that he had rejected an Iranian proposal to reopen the Strait of Hormuz within seven days in exchange for the United States lifting its blockade of Iranian ports. Iran had floated the offer through mediators on the sidelines of the UN General Assembly session in New York, and Trump's rejection reduced expectations that the chokepoint — through which roughly a fifth of the world's oil trade passes — would reopen to normal shipping any time soon. Markets read that as a signal the seven-month US-Iran war has further to run, not less.

Why a Washington decision moves a Karachi trading floor

Pakistan imports the bulk of its crude oil and refined fuel from Gulf suppliers whose tankers pass through Hormuz, so a jump in the international price of that oil raises the cost of the country's single largest import almost immediately. That link runs directly into the near-daily fuel-pricing mechanism Pakistan adopted this year specifically because of how unpredictable the war has made oil markets — a mechanism that saw the government revise petrol and diesel rates twice within the same week in late September. Investors on the PSX price that same import-cost pressure into everything from refiners and fertiliser makers, which depend on imported feedstock, to the broader import bill and its effect on the rupee. A rise in Brent tends to weigh on Pakistani equities for that reason, even when nothing has changed in the domestic economy on a given day.

The bigger picture

Monday's fall does not undo 2026's broader rally — the KSE-100 remains well above where it started the year — but it is a reminder of how exposed Pakistani markets stay to a conflict thousands of kilometres away. Prime Minister Shehbaz Sharif made a version of this same point at the UN General Assembly the previous week, telling delegates that the Strait of Hormuz and Yemen's Bab al-Mandab strait were "arteries of the global economy" that needed to stay open, and warning that a worsening US-Iran conflict could hit Pakistan's economy directly. Monday's session was a small, concrete illustration of exactly that mechanism at work.

What to watch next

With Trump reportedly telling aides he expects to resume bombing Iran only after November's US midterm elections, traders are likely to keep treating Hormuz-related headlines as a recurring input rather than a one-off shock. Whether the KSE-100 recovers the ground it lost on Monday will depend less on anything happening in Islamabad or Karachi than on how the next round of US-Iran diplomacy, or the lack of it, plays out in the weeks ahead.

Build Better Pakistan's Economy Desk tracks the PSX and the oil-price channel connecting Pakistani markets to the US-Iran war.