PSX surges over 4,500 points as US-Iran peace deal lifts investor sentiment

Bulls stormed the trading floor of the Pakistan Stock Exchange (PSX) on Monday, driving the benchmark KSE-100 Index up more than 4,500 points as a US-Iran peace deal and falling oil prices boosted investor confidence. 

According to the PSX website, the market opened on a strong note, with the KSE-100 Index gaining 4,518.76 points in the opening minutes to reach an intraday high of 176,917.76.

The index later sustained most of its gains and was trading at 175,550.77 as of 10:48 am, up 3,150.87 points, or 1.83%, from the previous close.

Broad-based buying was witnessed across major sectors, including apparel, automobile assembler, automobile parts & accessories, cement, commercial banks, fertiliser, technology & communication, transport, oil and gas exploration companies, oil marketing companies, and refineries.

Monday’s rally followed announcements from Pakistani Prime Minister Shehbaz Sharif and US President Donald Trump indicating that a deal had been reached to end hostilities between the United States and Iran.

"The Deal with the Islamic Republic of Iran is now complete," U.S. President Donald ‌Trump wrote on his Truth Social platform at around 5:30 p.m. in Washington (2130 GMT) on Sunday.

His post came shortly after Pakistani Prime Minister Shehbaz Sharif, whose country has served as a mediator, announced a deal had been struck early on Monday local time.

The memorandum of understanding is scheduled to be officially signed on Friday in Switzerland.

The precise terms were not immediately known. Sharif said in a post on X that the pact called for "the immediate and permanent termination of military operations on all fronts, including in Lebanon."

Iran said traffic through the strait would be regulated by it and Oman, a potential blow to the ​rules of free trade and suggesting there might be a toll of some sort on transits.

During the previous week, the benchmark KSE-100 Index gained 1,921 points, or 1.13%, on a week-on-week basis to close at 172,399.90 points.

The gains came despite sharp volatility and a brief drop below the key 170,000-point level, as easing tensions between the United States and Iran and declining international oil prices improved investor sentiment and revived risk appetite.

Global equities also cheered the positive news coming from the war-torn Gulf region. Share markets and bonds rallied hard in Asia on Monday and oil prices tumbled as a tentative peace deal between the United States ​and Iran promised to ease inflationary pressures globally and lessen the need for higher interest rates. 

The Nikkei climbed 4.9%. South Korea's red-hot market gained 5.4%, and Chinese blue chips firmed 1.4%. MSCI's broadest index of Asia-Pacific shares outside Japan rose 2.8%.

In Europe, EUROSTOXX 50 futures and DAX futures both rose ‌1.7%, while FTSE futures added 0.7%.

S&P 500 futures climbed 1.2%, while Nasdaq futures jumped 1.9% amid a general surge in risk assets.

Brent crude futures fell $4.08, or 4.7%, to $83.25 a barrel by 0415 GMT and U.S. West Texas Intermediate was at $80.53, down $4.35, or 5.1%. Both contracts ​fell to their lowest levels since March 10 on Monday after tumbling more than 3% on Friday.