PSX soars as Middle East tensions ease

Pakistan Stock Exchange (PSX) skyrocketed over 6,000 points on Tuesday as US President Donald Trump announced a ceasefire between Israel and Iran, bringing an end to regional hostilities.

The benchmark KSE-100 index surged at the open, where bullish momentum drove it to the intra-day high of 122,725, up 6,557 points. As the session progressed, investor confidence strengthened, culminating in the KSE-30 index hitting its upper circuit breaker, a rare and historic moment that sent a wave of excitement.

Market activity was further buoyed by renewed macroeconomic optimism, including news of Pakistan's plans to secure $3.3 billion in external financing from Chinese banks. Trading activity was robust, with 805 million shares changing hands valuing at Rs38 billion.

At the end of trading, the KSE-100 index recorded an increase of 6,079.17 points, or 5.23%, and settled at 122,246.64.

Arif Habib Limited (AHL) Deputy Head of Trading Ali Najib commented that regional peace ignited a rally at the PSX, which posted the second-highest surge of over 6,000 points in a day. The KSE-100 ended trading at 122,247 points by easily crossing the psychological barrier of 120,000.

Earlier, the bourse opened on a strong note with an increase of over 4,000 points post-ceasefire between Iran and Israel. There was across-the-board stock buying, which lifted the benchmark index to the high of 122,725 in intra-day trading, he said.

On the macro front, Najib pointed out, Pakistan plans to secure $3.3 billion via syndicated and refinanced commercial loans from Chinese banks, potentially boosting forex reserves to over $14 billion. "Now, all eyes are on the 130,000 index level by month end."

Topline Securities, in its review, said that the local bourse opened with a bang as investors cheered the breakthrough ceasefire agreement between Israel and Iran, which brought a welcome pause to rising geopolitical tensions in the region.

Riding on a wave of optimism, the KSE-100 index surged at the commencement of proceedings, clocking in an eye-popping 4,202-point jump. The bullish momentum intensified as the session progressed, culminating in a historic moment, when the KSE-30 index hit its upper circuit breaker, it said.

The KSE-100 reached the intra-day high of 6,557 points, before settling at 122,247, up a whopping 6,079 points, or 5.23%. The brokerage house called it a remarkable session that reflected renewed investor confidence and the return of broader risk-on sentiment.

Top contributors to the index were Lucky Cement, Engro Holdings, UBL, Pakistan Petroleum and Oil and Gas Development Company (OGDC), which collectively added 1,795 points.

Pakistan State Oil (Rs2.4 billion), OGDC (Rs1.98 billion), Pakistan Petroleum (Rs1.62 billion), Lucky Cement (Rs1.60 billion) and DG Khan Cement (Rs1.49 billion) dominated in terms of traded value, signalling strong interest in key blue-chip and mid-cap names, Topline added.

In its commentary, Arif Habib Limited (AHL) noted that diplomatic resolution to the Middle East conflict triggered a sharp rally in risk assets globally.

At the PSX, 96 shares rose while two fell on the KSE-100. Earlier, trading was halted following a 5% rise for the index. Lucky Cement (+9.4%), Engro Holdings (+7.85%) and UBL (+4.29%) contributed the most to index gains, AHL observed.

"Pakistan is aiming to secure $3.3 billion in two foreign loans – one a syndicated loan and the other refinancing of commercial loans – from Chinese banks. This will take State Bank's forex reserves above $14 billion in FY25," it said. "With the KSE-100 regaining its hold on the 120,000 range, 130,000 points comes back into focus."

According to JS Global analyst Mubashir Anis Naviwala, the PSX soared as ceasefire in the Middle East triggered a buying spree. "Just seconds after the market halt ended, the KSE-100 index surged over 6,500 points, sparking widespread euphoria," he said.

Bullish sentiment dominated the entire session, pushing the index to the intra-day high of 122,725. Investors jumped in across sectors, encouraged by signs of geopolitical de-escalation.

"Near-term outlook remains positive, with fresh opportunities in cement, banking and fertiliser sectors," the analyst added.

Overall trading volumes increased to 804.8 million shares compared with Monday's tally of 595 million. The value of shares traded was Rs37.6 billion. Shares of 477 companies were traded. Of these, 407 stocks closed higher, 35 fell and another 35 remained unchanged.

WorldCall Telecom was the volume leader with trading in 65.4 million shares, gaining Rs0.11 to close at Rs1.46. It was followed by K-Electric with 54.3 million shares, gaining Rs0.35 to close at Rs5.24 and Cnergyico PK with 37.9 million shares, gaining Rs0.53 to close at Rs7.16. During the day, foreign investors sold shares worth Rs418 million, the National Clearing Company reported.