PSX rebounds as budget date clarity offsets jitters over renewed US-Iran fighting

Buying returned to the Pakistan Stock Exchange (PSX) on Thursday as investors dismissed the renewed fighting between the United States and Iran, against political clarity at home after the government and coalition allies, particularly the Pakistan Peoples Party (PPP), agreed that the federal budget would be presented on June 10.

According to the PSX website, the market opened on a positive note, with the KSE-100 Index gaining more than 1,100 points to reach 171,346.40 in early trade. As the session progressed, the index maintained its upward momentum, and by 2:15 pm, it was hovering at 171,110.78, up 920.14 points, or 0.54%, from the previous close. 

Buying was recorded in key sectors, including automobile assemblers and parts makers, cement, commercial banks, mutual and exchange traded funds, fertiliser, oil and gas exploration companies, oil marketing companies, power generation, and refinery.  

The recovery came after the federal government and the Pakistan Peoples Party (PPP) agreed to recommend to Prime Minister Shehbaz Sharif that the federal budget for fiscal year 2026-27 be presented on Wednesday, June 10, 2026, according to a statement issued by the Deputy Prime Minister’s Office.

The discussions focused on current expenditure and development spending priorities, including the Public Sector Development Programme (PSDP), as well as broader economic priorities such as fiscal sustainability, public welfare measures, development initiatives, and inclusive growth for the fiscal year 2026–2027.

The rebound followed a negative session on Wednesday, when the benchmark index lost 831.13 points, or 0.49%, to close at 170,190.64 points.

Market sentiment also remained linked to developments on the United States-Iran diplomatic and security front, as renewed tensions continued to influence investor caution across regional and global markets.

Asian stocks fell on Thursday as renewed fighting between the ​U.S. and Iran rattled investors, although oil slipped from recent highs after Israel and Lebanon agreed to a ceasefire.

MSCI's broadest index of ‌Asia-Pacific shares outside Japan was down 1.6%, while S&P 500 e-mini futures slipped 0.4%. Korean shares reopened as much as 2.6% lower after a holiday, while Japan's Nikkei 225 slumped 1.4%.

Brent crude futures fell 0.7% to $97.14 a barrel as trading resumed on Thursday after Lebanon and Israel agreed to implement a ceasefire.

The Australian dollar gained after data showed Australia’s trade balance returned to surplus in April, following an unexpected deficit in the previous month, as stronger resource exports helped offset a rise in fuel imports. The currency later gave up those gains to trade flat.

The US dollar index, which tracks the greenback against a basket of six major currencies, was steady at 99.45 after a three-day rally that took it to its highest level since April 7.

The yield on the US 10-year Treasury bond remained unchanged at 4.489%.

Gold rose 0.9% to $4,473.61 per ounce, staying within the trading range it has held since the middle of last month.

Bitcoin fell 1.2% to $64,118.15, recovering slightly after touching a four-month low, while ether gained 0.4% to $1,787.00.

Bitcoin has fallen as much as 17% during five consecutive days of losses, pressured by a stronger US dollar, rising yields and weaker risk sentiment, IG analyst Tony Sycamore wrote in a client note.