PSX surges nearly 7,000 points on hopes of US-Iran breakthrough

According to the PSX website, the market opened in positive territory, with the KSE-100 surging over 3,300 points during the early trade. As the session progressed, the bullish momentum continued, and the index climbed to 170,238.82, up by 5,634.97 points by 2:30 pm. At close, the KSE-100 settled at 171,704.75, with an increase of 6962.28 points or 4.23% from the previous close.

Broad-based buying activity was witnessed across major sectors, including automobile assembler, automobile parts & accessories, cement, commercial banks, oil & gas exploration companies, OMCs, pharmaceuticals, power generation & distribution and refinery. 

Market participants said that investor sentiment had shifted from “crisis mode to growth mode” following easing tensions in the Strait of Hormuz.

Reuters reported, citing a source from mediator Pakistan familiar with the negotiations, that the US and Iran are closing in on an agreement on a one-page memorandum ​to end the war in the Gulf.  The Pakistani source said a report earlier by the U.S. media outlet Axios on ‌the proposed memorandum was accurate. The Axios report had cited two U.S. officials and two other sources familiar with the discussions.

PSX's rally followed gains recorded in the second half of the previous session, when the benchmark index closed 793.53 points or 0.48% higher at 164,742.47 points as investors responded positively to reduced geopolitical tensions despite volatility in global energy markets.

Globally, stocks leapt, and oil ​prices dropped on Wednesday after a report said the White House believed it was closing in on a memorandum to ‌end the war with Iran, while momentum in AI-driven trades accelerated.

Brent crude, the global benchmark, plunged 10.6% to $98.20 per barrel, its lowest in ​two weeks.

MSCI’s All-Country World Index rose 0.4% to ​a fresh record alongside similar milestones for its Emerging Markets benchmark and its broadest index of Asia-Pacific shares outside Japan, which jumped ​2.8%. The share surge was led by a 6.6% charge for South Korea’s Kospi, which cleared the 7,000 mark ⁠for the first time.

Elsewhere in foreign exchange markets, the yen strengthened sharply in afternoon trading, gaining as much as 1.8% to 155 against the ​dollar as traders remained on the lookout for fresh intervention by authorities in Tokyo in support of the beleaguered currency.

As the Seoul market reopened after a holiday, Samsung Electronics jumped 14.8%, topping a $1 trillion market value, overtaking Berkshire Hathaway and closing in on Walmart.

In the foreign exchange markets, the U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, was down 0.3% at 98.02.

The euro stood at $1.1736, and sterling was at $1.3588, both up around 0.4% so far on the day.

The Australian dollar ⁠fetched $0.7246, rising ​about 0.9% to the highest since June 2022, buoyed by improved risk appetite and ​underpinned by a third straight interest-rate hike a day earlier. The New Zealand dollar was up 1% at $0.5947.

The yield on the U.S. 10-year Treasury bond was flat at 4.424%.

Gold was 2.1% ​higher at $4,651.84. In cryptocurrencies, bitcoin nudged 0.5% lower to $81,264.67 while ether was down 0.8% at $2,364.40.