PSX surges over 3,800 points as hopes of US-Iran peace deal lift investor sentiment

The Pakistan Stock Exchange (PSX) witnessed strong buying momentum on Monday as investor sentiment improved on expectations of a possible US-Iran peace deal, easing regional tensions, and falling oil prices, lifting the benchmark KSE-100 Index above the 171,000 mark.

According to the PSX website, the market opened on a positive note, with the KSE-100 Index climbing as much as 3,675.05 points to 171,519.26 during the early minutes of trade. The rally continued through the session, and by close, the benchmark index settled at 171,725.29, up 3881.05 points, or 2.31%, from the previous close.

Strong buying was observed across major sectors, including automobile parts & accessories, automobile assemblers, cement, chemical, commercial banks, engineering, fertiliser, real estate investment trust, oil and gas exploration companies, and oil marketing companies. Index-heavy stocks, including HBL, MCB, MEBL, MARI, OGDC, PPL, POL and HUBCO, traded in positive territory.

Investor sentiment was also supported by reports that two liquefied natural gas (LNG) tankers were exiting the Strait of Hormuz on Monday and heading towards Pakistan and China. Shipping data also showed that a supertanker carrying Iraqi crude oil for China departed the Gulf on Saturday after remaining stranded for nearly three months.

Market participants viewed the resumption of cargo movement through the Strait of Hormuz as a positive signal for regional energy supply stability.

Today’s rally followed gains recorded during the previous week, when the benchmark KSE-100 Index increased by 2,248.19 points on a week-on-week basis to close at 167,844.25 points.

Globally, stocks surged on Monday while the U.S. dollar and oil prices slid ​as the prospect of a deal to end the Iran war buoyed risk appetite, although a lack of clarity over when the Strait of Hormuz would ‌open kept enthusiasm in check.

U.S. President Donald Trump said on Sunday he had told his representatives not to rush into any deal with Iran, as his administration played down hopes of an imminent breakthrough.

Just a day ​earlier, Trump said Washington and Iran had "largely negotiated" a memorandum of understanding on a deal that would reopen the waterway, which carried one-fifth of global oil ​and liquefied natural gas shipments before the war.

European futures rose 1%, pointing to a strong open, while Nasdaq futures were 1.4% higher and S&P futures were up 1%. Liquidity is likely ​to be thin as markets in the U.S. and UK are closed on Monday.

On Monday, oil prices hit two-week lows to kickstart the week with Brent ​crude futures down over about 6% to $97.75 a barrel, while U.S. West Texas Intermediate was at $90.87 a barrel, also down nearly 6%.

In Asia, Japan's Nikkei jumped 3% to roar past the 65,000 level for the first time and Taiwan stocks also jumped to a record high. MSCI's broadest index of Asia-Pacific shares outside Japan rose 1%.

Global stocks have mostly shrugged off war worries and instead have focused on all ​things AI and a strong earnings season, ​which has led to equities hitting ⁠record highs through the year.