Key Takeaways
- The Pakistan Stock Exchange’s benchmark index rebounded sharply on Wednesday.
- Investors engaged in value buying after heavy selloffs triggered by geopolitical tensions.
- The KSE-100 closed at 175,285.78 points, up from the previous close of 173,518.81.
The Pakistan Stock Exchange (PSX) saw a significant recovery on Wednesday, with its benchmark index, KSE-100, gaining over 1,700 points to settle above the 175,000 mark. The index closed at 175,285.78 points, marking a substantial turnaround from Tuesday's steep losses.
According to Mettis Global, a web-based financial portal, the market was rebounding from previous session’s heavy selloffs as investors engaged in value buying. This sentiment shift came after United States President Donald Trump replaced his proposed 20 per cent toll on ships navigating the Strait of Hormuz with investment commitments from Gulf Cooperation Council (GCC) countries.
Awais Ashraf, director of research at AKD Securities, highlighted that investor sentiment had turned positive following these developments. He noted that lower-than-expected US inflation had eased concerns over further Federal Reserve rate hikes, which improved the outlook for capital flows into frontier markets and reduced pressure on the Pakistani rupee.
The rebound in the stock market was also influenced by oil prices, which extended their gains as Trump reimposed a naval blockade on all Iranian ports. Brent futures climbed to $85.72 per barrel, while West Texas Intermediate futures gained to $79.98 per barrel. These price movements contributed to the overall positive sentiment in the market.
On Tuesday, the stock market experienced extreme selling pressure, pulling the benchmark KSE-100 index below 174,000 points. Equity investors lost a staggering Rs706 billion amid persistent panic stemming from geopolitical developments and a surge in oil prices following Trump’s announcement of imposing a 20 per cent charge on ships navigating the Strait of Hormuz.
However, he later backtracked, stating that the strait was open to all shipping traffic except that of Iran. This reversal helped stabilize investor sentiment, leading to Wednesday's recovery. The market saw significant buying interest in heavyweight sectors such as commercial banks, automobile assemblers, cement, oil and gas exploration companies, oil marketing companies, power generation, and refinery stocks.
Trading activity remained healthy with more than 135.68 million shares changing hands by midday, generating a turnover value of Rs10.92 billion. Despite the positive close, market sentiment would likely remain sensitive to further developments on the geopolitical front, particularly any escalation that could affect global oil prices and regional financial markets.
The KSE-100 index was rebounding from the previous session’s steep losses as investors engaged in value buying after heavy selloffs.
Mettis Global, Web-based financial portal
Investor sentiment had ‘turned positive’ after United States President Donald Trump replaced the proposed 20 per cent toll on Strait of Hormuz traffic with investment commitments from GCC countries.
Awais Ashraf, Director of research at AKD Securities
