In stellar performance, PSX gains 4,640 points

Positive cues trigger rally as investors welcome budget reforms, easing US-Iran tensions

KARACHI:

Pakistan Stock Exchange (PSX) on Monday delivered a stellar performance as investors embraced the government's reform-oriented budget measures and responded positively to reports of a preliminary peace agreement between the United States and Iran.

The benchmark KSE-100 index opened on a strong footing with investors accumulating stocks across major sectors on expectations of improved economic prospects and regional stability. The index swung between the intra-day high of 177,176.73 and the low of 175,085.79 before closing at 177,039.83, registering robust gains of 4,639.92 points, or 2.69%.

Broad-based buying was observed in key sectors including commercial banks, fertiliser, cement, oil and gas exploration companies, oil marketing companies (OMCs) and refineries, which remained at the forefront of the rally. The momentum was further supported by anticipation that the budget's reform measures would strengthen macroeconomic stability and improve the corporate earnings' outlook.

However, the State Bank of Pakistan (SBP) kept its policy rate unchanged that caused disappointment among the business community. According to KTrade Securities, investor sentiment remained firmly positive throughout the session. The market witnessed broad-based buying, allowing the benchmark index to maintain its upward momentum and finish the day comfortably in positive territory.

Sector-wise, major strength was observed across commercial banks, cement, oil & gas, power, investment companies, technology and fertiliser. Investor optimism was primarily driven by reports that a peace agreement between the US and Iran had been finalised and was expected to be formally signed later in the week. The development helped ease geopolitical concerns and improved the broader risk environment. Going forward, market sentiment is likely to be influenced by further developments surrounding the peace agreement, global market trends and implementation of the recently announced FY27 budget measures, taken positively by market participants, KTrade added.

Arif Habib Limited (AHL) observed that the PSX finally breached the 175k level via a "strong gap-up" to close higher by 2.69% at 177k. An impressive 87 shares rose while 13 fell with UBL (+5.7%), Hub Power (+4.18%) and Lucky Cement (+4.51%) contributing the most to the index gains. In contrast, TRG Pakistan (-1.33%), Bank AL Habib (-0.16%) and Thal Limited (-0.59%) were the biggest index drags.

Meanwhile, the SBP kept its key interest rate unchanged at 11.5%, becoming the first central bank to respond to the Iran peace deal and betting that the disinflationary impact of lower oil costs would aid its efforts to cool consumer prices. The FY27 budget, which includes lower taxes on sectors like cement and textile, lifted related stocks as the country sought to balance growth with commitments to the IMF.

The multi-month consolidation period has come to an end with the KSE-100 moving through 175k and approaching the upper end of the weekly target of 178k, wrote AHL. Cumulatively, trading volumes increased to 988.1 million shares compared to the previous tally of 890.8 million. The value of traded shares stood at Rs63.5 billion.

In the ready market, shares of 494 companies were traded. Of these, 349 stocks closed higher, 119 fell and 26 remained unchanged.

Kohinoor Spinning was the volume leader with trading in 64.1 million shares, rising Rs0.38 to close at Rs6.26. Foreign investors bought shares worth Rs1.36 billion, the National Clearing Company reported.