PSX: KSE-100 settles above 168,000 level amid optimism over US-Iran talks

The Pakistan Stock Exchange (PSX) witnessed a strong bullish session on Tuesday amid expectations of a positive outcome from talks between the US and Iran, with the benchmark KSE-100 Index closing above the 168,000 level.

The market opened on a positive note, with buying activity pushing the index higher during the morning session. The benchmark initially gained momentum, climbing towards its intraday high of 168,469.78 points, reflecting strong investor interest.

However, the upward momentum weakened around midday as profit-taking emerged, dragging the index lower towards its intraday low of 167,308.65 points. The market subsequently moved in a relatively narrow range, with intermittent buying and selling keeping the index under pressure.

During the final trading hours, renewed buying interest helped the benchmark recover some of its earlier losses.

At close, the benchmark index settled at 168,018.86, up 1,454.80 points or 0.87%.

Analysts were of the view that the buying interest reflects a shift in how investors are reading the geopolitical situation, not an absence of risk.

“Renewed diplomatic engagement on the Middle East conflict has pulled international oil prices lower, and for Pakistan that matters directly through the import bill, the current account and inflation,” Saad Hanif, Head of Research at Ismail Iqbal Securities, told Business Recorder.

“At the same time, the market had corrected through October, so investors who stayed on the sidelines are now selectively re-entering index heavyweights in banks, E&Ps and cement, where valuations look reasonable against earnings,” he said.

However, the recovery remains headline-driven, said Saad.

“Any breakdown in peace talks or a renewed spike in oil could reverse sentiment quickly, so we would expect volatility to persist in the near term, with investors favouring fundamentally strong, dividend-paying stocks.”

Similarly, Waqas Ghani, Head of Research at JS Global, said that the equities remain positive amid “expectations of some development on talks between the US and Iran”.

On Monday, PSX closed marginally higher as support from select heavyweights was offset by renewed selling pressure in refinery stocks following a government decision to absorb higher petrol import costs through a reduction in the Petroleum Levy. The benchmark KSE-100 Index gained 154.81 points, or 0.09%, to close at 166,564.07 points.

Globally, stocks edged lower at the start of Asian trade on Tuesday, and oil prices stabilised after the previous session’s tumble, with ‌investors on edge ahead of the start of voting for the US midterm elections.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.9%, led by a decline of as much as 3.8% in Korean shares.

S&P 500 e-mini futures edged up 0.1%, while Japanese markets are closed for a holiday.

Overnight, stocks on Wall Street edged ⁠lower, with the S&P 500 slipping 0.5% as tech sector earnings weighed on investor confidence, even as data showed US manufacturing activity picked up in October amid ​strong domestic demand.

Apple shares extended losses, falling 2.8% in after-hours trading after the iPhone maker on Monday forecast lower gross margins for the crucial holiday quarter, citing rising ​memory-chip costs, and projected services revenue growth that fell well short of Wall Street expectations.

Investors are also preparing to vote in the US midterm elections, where President Donald Trump’s Republican Party is facing a challenge to keep its hold on Congress.

Opinion polls favour the Democrats to win the House, though the Senate remains too close to call. Prediction market sites Polymarket and Kalshi currently ​assign around a 75% probability that the Democrats will control the Senate.