PSX: KSE-100 settles with over 3% gain as US-Iran tensions ease

Massive buying was observed at the Pakistan Stock Exchange (PSX) after US President Donald Trump said US military action against Iran ​is not necessary “at this point”, with the benchmark KSE-100 gaining over 3%, its biggest single-day gain in recent weeks, on Tuesday.

The index opened higher and held gains through the session to close near its intraday high of 179,424.04.

At close, the benchmark index settled at 179,335.24, up 5,448.56 points or 3.13%.

“Today’s rally reflects a clear repricing of risk on the PSX,” Saad Hanif of Ismail Iqbal Securities told Business Recorder.

“Easing geopolitical tensions have lowered the risk premium on Pakistani equities, while softer oil prices bode well for the import bill, current account and inflation outlook. If sustained, this could also open room for monetary easing, and investors are positioning early,” he added.

Topline Securities said investor sentiment remained upbeat amid easing international oil prices and diminishing concerns over a potential escalation in geopolitical tensions between the United States and Iran. The decline in global crude oil prices further bolstered market confidence, it added.

On the contribution front, UBL, FFC, HUBC, LUCK and MEBL emerged as the leading positive contributors, collectively adding approximately 1,982 points to the benchmark index and providing significant support to the market’s overall performance, Topline said.

During the previous week, the PSX recorded its strongest weekly rally in nearly six months, with the benchmark KSE-100 Index surging 7,477.44 points, or 4.5% week-on-week, to close at 173,886.69 points.

Globally, Asian stocks rose on Tuesday as a drop in oil prices after US President Donald Trump said he plans to hold off on new military strikes ​against Iran lifted sentiment ahead of US inflation data that could sway the near-term interest rate outlook.

Brent crude futures were hovering at their lowest ‌levels since early September, well below $100 per barrel, as investors pinned their hopes on possible talks between the US and Iran.

They were last down 1% at $91.56 a barrel.

The US-Israeli war with Iran, which erupted at the end of February, has stoked inflationary concerns across the globe, spurring major central banks to raise rates in recent months.

Nick Twidale, chief market strategist at ATFX Global, said the latest ​developments offered hope that an end to the conflict could be approaching, but there was still a considerable gap between diplomacy and a lasting ​peace agreement.

The slump in oil prices eased inflation worries and helped lift stocks after last ​week’s rout as a sweeping victory by Democrats in the US midterm elections fed concerns that new regulations could dent the durability of the AI trade.

South Korea’s ​KOSPI rose over 5%, while Japan’s Nikkei gained about 3% in early trading. MSCI’s broadest index of Asia-Pacific shares pushed 1.5% higher, moving away from the seven-month low it hit last week.

On Monday, the S&P 500 clocked its biggest one-day jump since April, closing up 2.35% while the Nasdaq closed 2.7% higher, its best day in over four months.

Earnings ​reports due this week from tech companies including CoreWeave, a barometer of investor anxiety over AI, will be another test for markets as investors fret about the cost of the ‌AI buildout.

Meanwhile, the Pakistani rupee continued its marginal gain against the US dollar in the inter-bank market on Tuesday. The local unit closed the day at 276.65, a gain of Re0.01 against the greenback.

Volume on the all-share index decreased to 972.43 million from 1,479.99 million recorded in the previous close.

The value of shares rose to Rs50.66 billion from Rs22.57 billion in the previous session.

Cnergyico PK was the volume leader with 70.09 million shares, followed by Tasdeeq Information with 46.85 million shares, and K-Electric Ltd with 42.27 million shares.

Shares of 501 companies were traded on Tuesday, of which 363 registered an increase, 107 recorded a fall, and 31 remained unchanged.