PSX soars nearly 4,000 points in euphoric rally

Buying frenzy sparked by US midterm polls that lift hopes of ME peace

KARACHI:

A wave of cheer swept through the Pakistan Stock Exchange (PSX) on Wednesday as the potential easing of geopolitical tensions and a shift in Washington's political dynamics following the US midterm elections lifted investor confidence. Reflecting the upbeat mood, the benchmark KSE-100 index surged 3,994.62 points, or 2.38%, to settle at 172,013.48, crossing another major milestone and posting one of its strongest gains in recent months.

Earlier, the market opened on a positive note, with the index gaining 1,707.48 points, or 1.02%, to reach 169,726.34 at 10:04 am. A further boost came from the decline in international oil prices as investors weighed implications of the US midterm election results against uncertainty about Washington's next move in the war with Iran. The combination of softer oil prices and hopes of a possible easing of geopolitical tensions provided an encouraging backdrop for equities.

"Buying by institutional investors and funds, hopes of a shift in the US political landscape following the midterm elections, reports of a draft proposal between the US and Iran, and relatively stable oil prices around $103 a barrel all contributed to the market's positive momentum," Arif Habib Limited Head of Research Sana Tawfik told The Express Tribune. She added that investors were closely monitoring geopolitical developments, particularly the US midterm election results, which indicated a shift in the balance of power in Washington.

Internationally, Brent crude futures fell $1.75, or 0.7%, to $101.85 a barrel, after dropping $2 earlier in the session. Similarly, the US West Texas Intermediate (WTI) crude futures declined $1.18, or 1.2%, to $94.91 a barrel, reversing an earlier gain of $1.

According to Ahmed Sheraz, equity trader at KASB KTrade, the PSX witnessed a remarkable recovery, with the KSE-100 index closing at 172,013, gaining 3,995 points, or 2.38%. Trading activity remained robust, where 371 million shares changed hands, reflecting a broad-based improvement in market sentiment.

The rally was primarily driven by banking, fertiliser and power stocks, with UBL, Fauji Fertiliser and Hub Power emerging as major contributors to the index's gains. Strong participation across these sectors highlighted the widespread recovery in investor trust, he said.

On the international front, easing oil prices, with Brent hovering around $102-104 per barrel, provided further support to investor sentiment. Additionally, Trump's indication that no immediate military strike was planned against Iran, alongside ongoing diplomatic efforts, raised hopes of potential de-escalation in the Middle East.

Meanwhile, the US midterm elections provided significant gains for the Democrats, who secured control of Congress. "Going forward, easing oil prices and improving geopolitical sentiment could keep the outlook constructive, although developments in the Middle East will remain the key to market direction," Sheraz predicted.

Cumulatively, trading volumes jumped to 841.6 million shares from Tuesday's total of 517.3 million. The value of traded shares stood at Rs35.4 billion.

Shares of 499 companies were traded in the ready market. Of these, 368 stocks closed higher, 103 fell and 28 remained unchanged.

TPL Properties topped the volumes with trading in 67.9 million shares, gaining Rs0.68 to close at Rs12.67. Foreign investors sold shares worth Rs1.16 billion, the National Clearing Company reported.