KSE-100 crosses 170,000 on hopes of easing US-Iran tensions

The Pakistan Stock Exchange (PSX) rallied again on Wednesday, with the benchmark KSE-100 index crossing the 170,000 mark as investors returned to the buying counter, The Express Tribune reported.

By 1.19pm the index was trading at 170,585.81, up 2,566.95 points, or 1.53 per cent, from Tuesday’s close of 168,018.86. It had opened on a positive note, gaining 1,707.48 points, or 1.02 per cent, to stand at 169,726.34 at 10.04am, and touched an intraday high of 170,695.39. The figures are from mid-session trading, not the closing level.

What is driving the buying

Brokers and analysts linked the rise to the war between the United States and Israel on one side and Iran on the other, and to the political change in Washington. The outcome of the US midterm elections, in which Democrats won both the House of Representatives and the Senate and took Congress from President Donald Trump’s Republicans, raised hopes of a shift in Washington’s approach to the war. Investors, the Tribune said, appeared willing to look past immediate uncertainties and focus on the possibility of diplomatic engagement and calmer regional conditions. The new Congress takes office in January 2027, which means a period of divided government.

Qatar’s stepped-up mediation to avoid further fighting also supported sentiment. Our report on how the Democrats won Congress and what happens next sets out the political background.

Oil is still the risk

International oil prices rebounded after earlier falls. Brent crude futures rose 76 cents, or 0.7 per cent, to $104.36 a barrel at 7.30am GMT, and US West Texas Intermediate gained 63 cents, or 0.7 per cent, to $96.72. The Tribune said the recovery reflected continuing worries about supply disruption and uncertainty around the Strait of Hormuz, even as hopes grew of progress towards ending the war.

Those worries have not gone away. Trump told the Financial Times that the US had no immediate plans to strike Iran, but also said American forces were “locked and loaded”; we reported what he said and how oil reacted. Tuesday’s trading shows how mixed the signals are: the market rose even though a US strike on Iran’s Qeshm Island and an Iranian official’s remark that Tehran and Washington were far from a deal had pushed oil back up.

How Tuesday set up the rally

The KSE-100 gained 1,454.80 points, or 0.87 per cent, on Tuesday to close at 168,018.87, according to figures from Topline Securities cited by Dawn. It ranged between a low of 167,308.66 and a high of 168,469.78. Trading volume rose to 517.3 million shares from 443.4 million the day before, and the value of shares traded was Rs20.7 billion. Of 500 companies traded in the ready market, 270 closed higher, 189 fell and 41 were unchanged.

Heavyweight stocks did most of the lifting. Fauji Fertiliser, Engro Holdings, Pakistan Services, Meezan Bank and Engro Fertiliser together added about 701 points, Dawn reported. Cnergyico PK led the volume chart with 114.8 million shares and lost 54 paisas to close at Rs11.74. Foreign investors were net sellers that day, offloading shares worth Rs492.9 million, according to the National Clearing Company.

Ahmed Sheraz of KASB KTrade described Tuesday’s session as one of broad-based buying led by commercial banks, fertiliser companies, cement firms and investment banks. Ali Najib, deputy head of trading at Arif Habib Limited, said the market had extended the overnight upsurge from the opening bell on hopes of a resolution to the conflict.

Why it matters

The PSX has swung sharply on regional news this autumn. Earlier we reported that the index fell 1,965 points when a security emergency was declared in Khyber Pakhtunkhwa and that it reclaimed 166,000 in mid-October. The latest move takes the benchmark beyond both levels, but a rally built on hopes of diplomacy can fade quickly if talks stall.

For ordinary Pakistanis the link is oil. Prime Minister Shehbaz Sharif said on Wednesday that international energy prices had risen sharply because of instability in the region, so a durable fall in crude would ease pressure on fuel prices, while a renewed strike would add to it. Analysts quoted by the Tribune and Dawn expect the market to stay volatile. What to watch is whether the index holds above 170,000 at the close, how Washington answers Qatar’s mediation, and whether foreign investors, who sold on Tuesday, return to buying.

This article draws on reporting by The Express Tribune and Dawn.