KSE-100 gains over 2.3% as Iran, US move closer to peace agreement

The KSE-100 Index kicked off the Eid holiday-shortened week on a strong note, surging nearly 3,900 points or 2.31% on Monday as investor sentiment improved amid growing optimism that the United States and Iran were moving closer to a peace deal.

The market opened on a volatile note, with sharp swings during the early trading hours as investors initially booked profits. However, buying momentum gradually strengthened, helping the benchmark recover losses and move steadily upward throughout the session.

During the mid-session, the index traded in a relatively narrow range near the 170,300–170,700 level.

Around the latter half of the trading session, aggressive buying activity emerged across the board, triggering a strong rally that pushed the market towards an intra-day high of 171,920.80.

At close, the benchmark index settled at 171,725.29, up by 3,881.05 points or 2.31%.

“Investor confidence improved significantly following positive developments over the weekend regarding negotiations between Iran and the United States, with reports indicating that discussions may reach a conclusion in the near term. Sentiment was further bolstered by a sharp decline in international oil prices, which fell by nearly $6 per barrel,” brokerage house Topline Securities said in its post-market report.

“The bullish momentum was primarily driven by heavyweight stocks, including Habib Bank Limited, Fauji Fertilizer Company, United Bank Limited, Engro Holdings, and Lucky Cement, which collectively contributed 1,315 points to the benchmark index and played a key role in sustaining the rally,” it added.

It was also learnt that two liquefied natural gas tankers were exiting the Strait of Hormuz on Monday, heading to ‌Pakistan and China, while a supertanker with Iraqi crude for China left the Gulf on Saturday after being stranded for nearly three months, shipping data showed.

During the previous week, Pakistan’s stock market posted modest gains during the outgoing week, as improving investor sentiment amid growing prospects of negotiations to ease regional geopolitical tensions supported equities despite persistent macroeconomic pressures. The KSE-100 Index closed at 167,844.25 points, registering an increase of 2,248.19 points on a week-on-week basis.

Internationally, stocks surged on Monday while the US dollar ​and oil prices slid as the prospect of a deal to end the Iran war buoyed risk appetite, although a lack of clarity ‌over when the Strait of Hormuz would open kept enthusiasm in check.

The nearly three-month-long conflict in the Middle East has driven energy prices sharply higher and reshaped the global rates outlook, as inflation concerns intensify following Tehran’s effective shutdown of the key strait through which a significant share of the world’s energy flows.

US President Donald Trump said on Sunday he had told ​his representatives not to rush into any deal with Iran, as his administration played down hopes of an imminent breakthrough.

Just a day earlier, Trump ​said Washington and Iran had “largely negotiated” a memorandum of understanding on a deal that would reopen the waterway, which carried ⁠one-fifth of global oil and liquefied natural gas shipments before the war.

Nasdaq futures were 1.2% higher, and S&P futures were up 0.7%. Japan’s Nikkei jumped ‌3% to ⁠roar past the 65,000 level for the first time. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1%.

Meanwhile, the Pakistani rupee posted a marginal gain against the US dollar in the inter-bank market on Monday. At close, the local currency settled at 278.51, a gain of Re0.01 against the greenback.

Volume on the all-share index declined to 506.35 million from 480.82 million recorded in the previous close.

The value of shares rose to Rs31.15 billion from Rs22.72 billion in the previous session.

B.O.Punjab was the volume leader with 27.29 million shares, followed by F. Nat.Equities with 25.57 million shares, and Pak Int.Bulk with 24.88 million shares.

Shares of 489 companies were traded on Monday, of which 345 registered an increase, 107 recorded a fall, and 37 remained unchanged.