The equity market came under heavy pressure on Monday, with investors remaining cautious amid escalating tensions between the United States and Iran, while the start of the roll-over period added to volatility.

The benchmark Pakistan Stock Exchange (PSX) KSE-100 Index closed at 167,691.08 points, falling 5,478.63 points or 3.16% from the previous session’s close of 173,169.71.

During intraday trading, the index touched a high of 174,336.85 before sliding to a low of 166,886.63, reflecting sharp swings throughout the session.

Market analysts attributed the decline to geopolitical uncertainty. Huzaifa Riaz, Director at Mayari Securities, said investors adopted a cautious stance due to rising US-Iran tensions and the absence of strong near-term market triggers.

US President Donald Trump recently stated he would decide within “10 to 15 days” whether to order strikes on Iran if nuclear negotiations fail.

Reports indicated that military options were presented to him, including potential actions targeting Iran’s leadership.

On the economic front, data from the State Bank of Pakistan (SBP) showed that profit and dividend repatriation by foreign investors rose to $1.677 billion during the first seven months of FY26, compared to $1.328 billion a year earlier.

Pakistan recorded a current account surplus of $121 million in January, supported by strong remittances and controlled imports.

However, the cumulative current account balance showed a deficit of $1.07 billion in 7MFY26, compared to a $564 million surplus in the same period last year.

Meanwhile, weekly inflation measured by the Sensitive Price Indicator (SPI) rose 1.16% for the week ended February 19, according to the Pakistan Bureau of Statistics (PBS), with year-on-year inflation recorded at 5.19%.

The previous session had seen the KSE-100 gain nearly 1,000 points, but Monday’s sharp sell-off reversed those gains as geopolitical concerns dominated investor sentiment.

Asian markets inched higher on Monday after the US Supreme Court invalidated a major part of President Donald Trump’s tariff framework, a policy that had shaken the global economy since last year. Hong Kong’s HSI climbed more than 2% or 579 points reaching 26,992 with ecommerce heavyweights Alibaba and JD.com each jumping over three percent. Seoul also scaled a fresh record high to 5,816, buoyed by strong gains in chipmakers Samsung Electronics and SK hynix.Markets in Singapore, Wellington, Taipei and Manila also ended in positive territory, while Sydney slipped. Meanwhile, trading in Tokyo and Shanghai was shut due to holidays.The gains across the region were driven primarily by technology stocks. These companies have powered much of Asia’s market strength this year as investors increasingly shift funds away from Wall Street in search of relatively cheaper valuations. Trump’s trade strategy suffered a significant legal setback on Friday when the nation’s highest court ruled that the International Emergency Economic Powers Act, which the White House relied on in April to introduce broad tariffs, “does not authorise the president to impose tariffs”. In response, the president pledged to introduce a fresh global tariff of 10% using another legal route, which by Saturday, he had increased to 15%. The latest developments have injected a new layer of uncertainty into the trade outlook. There are now also demands for authorities to return funds collected under the earlier tariff scheme, while analysts caution that the administration could still look for alternative mechanisms to enforce duties.The court’s decision has also affected the outlook for trade agreements negotiated by Washington. Even so, investors in Asia largely welcomed the ruling, which is widely viewed as supportive for China and India. Technology counters emerged as the biggest winners.In currency markets, the dollar came under pressure, falling sharply against the yen, pound and euro. Meanwhile, oil prices declined by more than one percent on optimism surrounding a potential Iran nuclear deal.