PSX surges nearly 2,000 points as investor buying accelerates

Investor confidence remained strong at the Pakistan Stock Exchange (PSX) on Monday, with the benchmark KSE-100 Index climbing nearly 2,000 points during intraday trading as broad-based buying continued across major sectors.

According to the PSX website, the market opened in positive territory, with the KSE-100 Index rising more than 1,400 points in early trade. The benchmark extended its gains as buying activity remained strong throughout the session.

The rally was driven by buying in apparel, automobile assemblers, cement, commercial banks, fertiliser, glass and ceramics, oil and gas exploration companies, oil marketing companies and refineries.

As of 1:50 pm, the market was hovering at 186,950.90, with an increase of 1578.70 points or 0.85% from the previous close. 

The gains extended the market's strong performance from last week, when the KSE-100 Index rose 3.2% week-on-week. The rally was supported by an 8% weekly decline in Arab Light crude oil prices and lower yields in the latest Pakistan Investment Bond (PIB) auction.

Trading activity also strengthened during the previous week, with average daily volumes increasing 7.1% week-on-week to around 865 million shares, while the average daily traded value rose 27.7% to approximately $171 million.

Mutual funds emerged as the largest net buyers during the week, purchasing equities worth $23.5 million, followed by companies with net buying of $6.6 million. Insurance companies were the largest net sellers at $20.9 million, while individual investors sold shares worth $4.8 million.

According to Intermarket Securities, with the June quarter now concluded and geopolitical tensions easing, market participants are expected to shift their focus towards upcoming corporate earnings announcements. 

Globally, European stocks and U.S. futures ticked higher on ​Monday as the potential for increased energy supplies pulled down oil prices and promised relief from inflationary pressures, while ‌investors awaited a crucial earnings season for the AI sector.

While there were no new developments in the fractious U.S.-Iran peace talks, ships are passing through the Strait of Hormuz, with 160 vessels reported transiting from Monday to Saturday last week.

OPEC+ also agreed to a further increase in output targets by 188,000 barrels per ​day from August. Brent crude fell 1.4% to near four-month lows at $71.10 a barrel.

Europe's STOXX 600 rose 0.2% in early ​trading while futures for the S&P 500 climbed 0.5% after Friday's U.S. holiday break.

South Korea's hot market cooled a little last week but is still up 90% for the year so far as AI demand and ‌tight supplies ⁠boost chip prices. The KOSPI index eased 0.5% on Monday, while Japan's Nikkei was flat.