PSX opens week in the green, gains more than 5,000 points during early trade

The Pakistan Stock Exchange’s (PSX) benchmark index opened the week on a strong note, gaining more than 5,000 points during early trade.

The KSE-100 index had gained 4,501.33 points to reach 175,522.53 points by 9:50am from the previous close of 171,021.20 points. By 10:30am, the index had gained 5,068.88 points to reach 176,090.08 points.

Awais Ashraf, director of research at AKD Securities, said investor sentiment improved after the US and Iran paused military strikes, raising hopes for a diplomatic resolution to the Middle East conflict and the resumption of shipping through the Strait of Hormuz.

“The easing of geopolitical tensions has also increased the likelihood that the State Bank of Pakistan (SBP) will maintain the policy rate in today’s monetary policy announcement,” he said.

“We expect the SBP to adopt a cautious stance and keep the policy rate unchanged at today’s Monetary Policy Committee meeting, as it is likely to assess further developments in the Middle East and the economic impact of the recent flood situation,” he said.

Nevertheless, the ongoing “disinflationary trend, a comfortable external account position, weakening leading economic indicators, and a contraction in money supply continue to support the case for monetary easing in the coming months”, he said.

Meanwhile, Mettis Global, a web-based financial portal, attributed the rally to “easing geopolitical tensions and a sharp decline in global oil prices”, saying it improved investor sentiment.

Iran and the US held their fire on Monday, handing Gulf shipping and the oil industry a respite from missile strikes as Donald Trump’s UN envoy said the president was “giving talks some space”.

Oil prices also tumbled on Monday as investors breathed cautious sighs of relief at the pause in combat. The price of a barrel of international benchmark North Sea Brent crude shed more than seven per cent at one point early on Monday to briefly drop back below $90, while US counterpart West Texas Intermediate was down four per cent at $85.45 a barrel.

The stock market had remained under pressure last week as the benchmark KSE-100 index lost 2.7 per cent amid escalating geopolitical tensions in the Middle East, rising international oil prices and cautious investor sentiment.

The KSE-100 index shed 4,782 points to close at 171,021.20 as concerns over the widening US-Iran conflict overshadowed positive domestic developments, including an upgrade in Pakistan’s sovereign credit rating.

Additional input from AFP