Karachi: The Pakistan Stock Exchange (PSX) continued its downward trend on Monday, with the KSE-100 index dropping more than 13,000 points at the start of the new trading week, as investors pulled funds in response to escalating tensions in the Middle East and fears of increase in policy rate.

The benchmark index shed massive 13,109.39 points to reach 144,386.71 points, reflecting a negative change of 8.32 percent compared to previous close of 157.496 points.

Earlier, trading activity was suspended at the stock market after it recorded a decline of over 10,000 points.

On the other hand, Oil prices surged about 20% on Monday, hitting their highest since July 2022, as the expanding U.S.-Israeli war with Iran led some major Middle Eastern oil producers to cut supplies and on fears of prolonged disruption to shipping through the Strait of Hormuz chokepoint.

Iraq and Kuwait have begun cutting oil output, adding to earlier liquefied natural gas reductions from Qatar, as the war blocked shipments from the Middle East.

Analysts predict the United Arab Emirates and Saudi Arabia will have to also cut output soon as they run out of oil storage.

The war could leave consumers and businesses worldwide facing weeks or months of higher fuel prices even if the week-old conflict ends quickly, as suppliers grapple with damaged facilities, disrupted logistics and elevated risks to shipping.

Brent crude futures ?rose as much as $18.35, or 19.8%, to $111.04 a barrel and were up $15.24, or 16.4%, at $107.93 as of 0014 GMT on Monday.

U.S. West Texas Intermediate (WTI) crude futures were up $16.50, or 18.2%, at $107.40 a barrel, after rising as much as $20.34, or 22.4%, to $111.24 earlier in the session.

Brent climbed 27% and WTI rose 35.6% last week, before the latest jumps.