PSX gains 1,455 points on ME peace talks

KARACHI: Pakistan Stock Exchange (PSX) extended its recovery on Tuesday as the benchmark KSE-100 index gained 1,455 points, fuelled by purchases of heavyweight stocks following recent market weakness. The positive momentum continued despite the Middle East conflict including reports of a US strike on Iran's Qeshm Island and an Iranian official's remarks that Tehran and Washington were far from a deal to end the war. These developments reversed somewhat the oil market relief, with crude prices rebounding after a steep decline in the previous session. The bourse opened on a positive note and maintained its upward trajectory throughout the session. It touched the intra-day high of 168,469.78 and low of 167,308.66 before settling at 168,018.87, up 1,454.80 points, or 0.87%. Despite renewed pressure from geopolitical developments and rising oil prices, investors kept their interest in local equities, with bargain hunting in heavyweight stocks providing crucial support. "PSX experienced a green session on Tuesday as the KSE-100 index gained 1,455 points (+0.87%) day-on-day, with 212 million shares traded," Ahmed Sheraz of KASB KTrade wrote in his market wrap. The market witnessed broad-based buying, led by commercial banks, fertiliser companies, cement firms and investment banks, reflecting improved investor sentiment. Individually, Fauji Fertiliser, Engro Holdings, HBL, Pakistan Services, Meezan Bank and Engro Fertilisers were the major contributors to the index. Oil prices remained relatively lower compared to the previous session, trading in the range of $104-106 per barrel after briefly touching $107. Meanwhile, market participants were focused on the US midterm elections, alongside US-Iran negotiations through mediators. Sentiment received support from President Trump's indication that the US had no immediate plans to strike Iran, raising hopes of a potential diplomatic breakthrough. "Going forward, developments on the geopolitical front, particularly the US elections and US-Iran parleys, will remain key factors shaping market direction," Sheraz added. "The market opened on a strong note in anticipation of resolution of the US-Iran conflict as fresh diplomatic efforts raised hopes again," Arif Habib Limited Deputy Head of Trading Ali Najib said. He attributed across-the-board buying, especially of blue-chip stocks, to softer oil prices, which assisted the benchmark index to close above 168k. Fauji Fertiliser, Engro Holdings, Pakistan Services, Meezan Bank and Engro Fertilisers were the major laggards, collectively eroding 702 points. "Going forward, the market is likely to stay volatile amid evolving US-Iran developments and global political uncertainty. Progress on diplomatic efforts may support sentiment, while investors remain cautious ahead of US election outcome," Najib said. Cumulatively, trading volumes increased to 517.3 million from Monday's total of 443.4 million. The value of traded shares stood at Rs20.7 billion. Shares of 500 companies were traded in the ready market. Of these, 270 stocks closed higher, 189 fell and 41 remained unchanged. Cnergyico Pk was the volume leader with trading in 114.8 million shares, losing Rs0.54 to close at Rs11.74. Foreign investors sold shares worth Rs492.9 million, the National Clearing Company reported.