PSX holds gains in choppy trade

Index ends up 955 points as early rally fades on geopolitical jitters

KARACHI:

The Pakistan Stock Exchange (PSX) opened the week on a strong footing, where the benchmark KSE-100 index surged in early trading. Investor sentiment was buoyed by expectations of a potential peace agreement between the US and Iran. Optimism around stable global oil prices further supported broad-based buying across the market.

At 9:34 am, the index climbed to 166,269.56, registering a gain of 3,275.56 points, or 2.01%. However, selling pressure intensified after reports that Iran forced a US warship to turn back from the Strait of Hormuz, stoking geopolitical concerns.

The index touched the intra-day high of 167,245.54 before slipping to the low of 163,417.84 as profit-taking emerged later in the session. Despite late-session volatility, the KSE-100 managed to close higher by 954.77 points, or 0.59%, at 163,948.94. Arif Habib Limited (AHL) observed that it was a strong open to the new week with the KSE-100 trading as high as 167k before late selling clipped gains to +0.59% day-on-day and it closed below 164k.

A total of 63 shares rose while 36 fell with United Bank (+1.23%), Fauji Fertiliser (+0.97%) and MCB Bank (+1.89%) contributing the most to the index gains. In contrast, Meezan Bank (-1.12%), Maple Leaf Cement (-2.19%) and Pakistan Oilfields (-0.94%) were the biggest index drags. Sitara Petroleum book building was fully subscribed in eight minutes at the price cap of Rs18.90, which was the quickest in the PSX history.

Towards the end of the session, Iran's Fars news agency reported that missiles were fired at a US warship in the Strait of Hormuz, which led to global equities' sell-off and 4% oil price rise, AHL mentioned. However, Washington denied that any such incident had taken place, which helped markets recover during US trading.

Domestically, the government will hold the National Assembly's budget session on June 1 and the federal budget will be presented in the same week. Market demand is expected to emerge below 160k with 175k still being the upside target for the KSE-100, AHL said. According to Ahmed Sheraz of KTrade Securities, the KSE-100 closed up 955 points (+0.59%) while wrapping up a "wild" session. The index touched the intra-day high of 167,246 and dipped to 163,418, reflecting sharp swings as sentiment flipped with every new headline.

The day kicked off on a strong note, fuelled by cooling international oil prices. Brent crude, which was hovering near $126/barrel last week, softened to around $107-108, giving the market breathing space and pushing the index comfortably into the black early on. However, midway through, the momentum reversed. News of Iranian engagement with US ships near the Strait of Hormuz sent oil soaring back towards $113-114. The market gave up most of its gains and briefly looked set to close in the red, before staging a late-session recovery to end nearly 1,000 points up, Sheraz wrote.

Topline Securities commented that the local bourse opened on a strong footing, buoyed by declining oil prices, and the index rallied to an impressive intra-day gain of 4,251 points. However, late-session jitters emerged as geopolitical tensions escalated following reports of a missile strike near the Strait of Hormuz, dampening sentiment and triggering profit-taking. Nonetheless, the market exhibited notable resilience, with the index settling at 163,949, up 955 points.