PSX recoups losses on ceasefire hopes

KSE-100 index gains 809 points, though oil surge worries investors

KARACHI:

The Pakistan Stock Exchange (PSX) experienced a turbulent start to the week on Monday, as the benchmark KSE-100 index came under pressure amid geopolitical tensions and uncertainty in global markets, keeping investors cautious.

In the morning, trading kicked off in a tense environment and by 11:34 am, the index lost 2,371 points (1.58%). A surge in global oil prices driven by fears of supply disruptions through a critical waterway also triggered the sell-off in equities. However, as the session progressed, investor sentiment showed signs of improvement on hopes of a potential ceasefire between the United States and Iran, following reports Pakistan had shared a draft proposal with both countries.

During the day, the market touched the high of 151,875 and low of 147,771, highlighting selling pressure and cautious sentiment. The index managed to recover early losses by the close of trading. It posted a modest increase of 809.10 points, or 0.54%, and settled at 151,207.82.

"Investors are cautious about the conflict between the US and Iran that has triggered oil price surge to record highs and brought Gulf trading to a halt due to the Strait of Hormuz closure," AKD Securities Director Research Mohammed Awais Ashraf told The Express Tribune.

Post-midday, investor sentiment turned positive on hopes of a ceasefire between the US and Iran after Pakistan shared the draft with the two countries. However, UBL's negative performance driven by concerns over potential pressure on its book value in the event of a rate hike partially offset the positive impact, Ashraf added. KTrade Securities, in its market wrap, wrote that the KSE-100 index recovered from early weakness to end positive. Initial sentiment remained cautious amid geopolitical uncertainty and oil hovering near $110 per barrel, alongside mixed Asian markets.

Intra-day direction turned positive after reports Pakistan was mediating between the US and Iran, having shared a proposed framework with both sides. This development eased immediate tensions, supporting a recovery by the close, while oil prices also softened slightly towards $107-108 per barrel.

Sector-wise, oil & gas, cement, select banks, power and fertiliser led gains, with Lucky Cement, Hub Power, Oil & Gas Development Company, MCB Bank, Fauji Fertiliser and Mari Energies contributing positively. Near-term market outlook hinges on geopolitical developments over the next 24 to 48 hours, particularly the US-Iran tensions and oil price movements, KTrade added.

Topline Securities observed that the local bourse endured a highly volatile session, where sharp two-way price action kept participants on edge. The index swung wildly, hitting the intra-day low of 2,627 points and high of 1,476 points, before settling at 151,208, up 809 points.

Early pressure reflected heightened geopolitical concerns; however, sentiment took a decisive turn as optimism around a potential ceasefire and the anticipated reopening of the Strait of Hormuz triggered a strong late-session recovery. The rebound was fuelled by aggressive value hunting and short covering. Among key laggards were UBL, Bank Alfalah, Attock Refinery, Pakistan Oilfields and Nestle, which shaved off 716 points. Conversely, Engro Holdings, Pakistan Petroleum, Lucky Cement, Hub Power, OGDC and MCB Bank lent some support by adding 666 points.

Overall trading volumes decreased to 457.2 million shares versus Friday's tally of 471.9 million. Shares of 483 companies were traded. Of these, 261 closed higher, 153 fell and 69 remained unchanged.

Cnergyico PK was the volume leader with trading in 58 million shares, losing Rs0.24 to close at Rs7.21. Foreign investors bought shares worth Rs83.3 million.