PSX recovers on US-Iran diplomatic signals

KSE-100 surges 5,044 points; investors stay focused on global peace hopes

KARACHI:

Pakistan's stock market on Tuesday surged over 5,000 points as investors drew strength from the talk of global calm despite failure of US-Iran talks on ending the Middle East war.

The rally reflected expectations of potential resumption of diplomatic engagements between the US and Iran, which revived hopes of a de-escalation in the conflict that had shaken global financial markets. At 9:39 am, the benchmark KSE-100 index was hovering around 164,322, with handsome gains of 3,731 points, or 2.32%.

The shift in sentiment came in stark contrast to the previous session, when the market endured heavy losses, falling 6,600 points, following collapse of peace negotiations and a spike in global oil prices. During Tuesday's session, the market touched the intra-day high of 165,764 and low of 163,417. At close, the index recorded a jump of 5,043.51 points, or 3.14%, and settled at 165,634.85.

"Investors are optimistic about the likely resumption of talks between the US and Iran on resolving the conflict," AKD Securities Director Research Mohammed Awais Ashraf told The Express Tribune.

Assurances from Saudi Arabia and Qatar to bridge Pakistan's external financing gap, created by the payment of $3.5 billion to the UAE, and higher imports due to elevated oil prices also helped lift investor sentiment. "This is likely to result in timely approval of $1.2 billion disbursement by the International Monetary Fund (IMF)," he said.

KTrade Securities equity trader Ahmed Sheraz wrote that the Pakistan Stock Exchange (PSX) staged a strong rebound, with the KSE-100 closing up 5,044 points (+3.14%), as sentiment sharply reversed following encouraging geopolitical developments.

The rally was driven by improved investor confidence after positive signals from US-Iran negotiations, where progress was indicated despite no final agreement. Further talks are expected in the coming days. Additionally, easing global risk perception, along with a pullback in oil prices towards $97-99 per barrel, provided support to equities. Positive cues from US markets and strength across Asian bourses also reinforced the positive momentum. The upside was broad-based, with heavyweights across commercial bank, cement, E&P and fertiliser sectors driving the index higher. UBL, Engro, Hub Power, OGDC, Habib Bank, National Bank and MCB Bank contributed significantly, Sheraz added.

JS Global analyst Nawaz Ali observed that buying activity with improved investor sentiment led to over 5,000-point surge in the KSE-100 index, where significant contribution came from index heavyweights such as UBL, Lucky Cement, Fauji Fertiliser, Engro Holdings and Hub Power. Hopes of easing US-Iran conflict contributed to a decline in crude oil prices and a recovery in global equity markets; both of which positively influenced investor confidence. The market was likely to stay sensitive to geopolitical developments and a sustained upward momentum would depend on greater clarity on the external front, Ali said.

According to Arif Habib Limited (AHL), the PSX took a solid move higher to regain the 165k level. On the KSE-100, 93 shares rose while six fell, with UBL (+3.85%), FFC (+2.45%) and Lucky Cement (+5.93%) contributing the most to the index gains.

The United States and Iran were weighing further negotiations to extend ceasefire and the second round of talks was expected either in Riyadh or Islamabad. In a major development, Saudi Arabia extended $3 billion in deposits to Pakistan. At the PSX, support was found at the 200-day moving average, which was structurally constructive and set the groundwork for a sustained move higher, AHL said.