The Pakistan Stock Exchange (PSX) experienced a wave of cheer on Wednesday as the benchmark KSE-100 index surged 3,994.62 points, or 2.38%, to settle at 172,013.48. This rally marked one of the strongest gains in recent months and saw the index cross another major milestone.
The market began the day on a positive note, with the index gaining 1,707.48 points, or 1.02%, to reach 169,726.34 at 10:04 am. The subsequent surge was fueled by a combination of declining international oil prices and investor hopes regarding a possible easing of geopolitical tensions.
Sana Tawfik, Head of Research at Arif Habib Limited, told The Express Tribune that the market's positive momentum was contributed to by "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." She noted that investors were closely monitoring the US midterm election results, which indicated a shift in the balance of power in Washington.
International oil prices provided a supportive backdrop for the equities. Brent crude futures fell $1.75, or 0.7%, to $101.85 a barrel after an earlier drop of $2. US West Texas Intermediate (WTI) crude futures declined $1.18, or 1.2%, to $94.91 a barrel, reversing an earlier gain of $1.
Ahmed Sheraz, an equity trader at KASB KTrade, described the PSX's performance as a "remarkable recovery." He stated that 371 million shares changed hands, reflecting a broad-based improvement in market sentiment. Sheraz noted that the rally was primarily driven by banking, fertiliser, and power stocks, specifically highlighting UBL, Fauji Fertiliser, and Hub Power as major contributors.
The rally also factored in Trump's indication that no immediate military strike was planned against Iran, alongside ongoing diplomatic efforts, which raised hopes of potential de-escalation in the Middle East. Additionally, the US midterm elections resulted in significant gains for the Democrats, who secured control of Congress.
Sheraz predicted that "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."
Cumulatively, trading volumes jumped to 841.6 million shares from Tuesday's total of 517.3 million. The value of traded shares reached Rs35.4 billion. Out of 499 companies traded in the ready market, 368 stocks closed higher, 103 fell, and 28 remained unchanged. TPL Properties led the volumes with 67.9 million shares traded, gaining Rs0.68 to close at Rs12.67. According to the National Clearing Company, foreign investors sold shares worth Rs1.16 billion.
