KARACHI:

With growing hopes for a lasting peace agreement between the United States and Iran, the Pakistan Stock Exchange (PSX) on Wednesday staged a robust rally, during which it notched up gains of nearly 7,000 points, powered by deep investor interest in high-yielding stocks across the board.

In the morning, the market commenced trading on a vibrant note as investors rejoiced news reports that the US president had signalled a temporary pause in operations to escort ships through the Strait of Hormuz following progress towards a broader agreement with Iran. The development injected a strong sense of relief into the financial landscape, prompting investors to return aggressively to equities.

During the session, the benchmark KSE-100 index oscillated between the intra-day high of 172,088.58 and low of 167,354.44. It ended trading with a staggering increase of 6,962.29 points, or 4.23%, to close at 171,704.76.

KTrade Securities equity trader Ahmed Sheraz noted that the KSE-100 delivered a powerful rebound, closing up 6,962 points (+4.23%), which marked a standout session with broad-based strength. Momentum remained firmly positive throughout the day, supported by strong KSE-100 volumes of 562 million shares, reflecting aggressive participation and renewed risk appetite after recent volatility.

Sector-wise, gains were widespread, where commercial banks, cement, exploration & production, and oil companies led the charge. Key index movers included UBL, Lucky Cement, Pakistan Petroleum, Fauji Fertiliser, OGDC, NBP and Hub Power; all contributing meaningfully to the upside and signalling institutional as well as retail alignment.

The rally was driven by a sharp drop in global oil prices – from around $126 per barrel to near $98 – amid easing Hormuz tensions and renewed progress in US-Iran negotiations. The market’s near-term direction hinges on geopolitical developments as a formal agreement could further stabilise oil prices and sustain the bullish momentum, while any setback may reintroduce volatility, Sheraz wrote.

According to Arif Habib Limited (AHL), the PSX hit 170k and “now it is en route to our short-term target of 175k, which seems obvious to everyone”. A total of 95 shares rose while five fell with UBL (+7.92%), Lucky Cement (+7.46%) and Pakistan Petroleum (+7.76%) contributing the most to the index gains.

International oil prices are down more than 10% day-on-day and equities around the world were surging following news that Iran was going to reopen the Strait of Hormuz and had agreed to a moratorium on nuclear enrichment with a full nuclear deal to be negotiated later.

Improving conditions are likely to support risk assets globally, as the worst-case scenario now appears to have been avoided. AHL predicted no change in outlook for the KSE-100 “with 175k in sight”.

Topline Securities, in its review, commented that the stock market staged a sharp rally as sentiment turned decisively positive following Trump’s signal of progress on a potential Iran deal, easing tensions around the Strait of Hormuz. The benchmark index surged to the intra-day high of 7,346 points and closed at 171,705, up 6,962 points (+4.23%), as bulls dominated the session.

The momentum received an additional boost when Prime Minister Shehbaz Sharif appreciated the timely de-escalation efforts. The endorsement cemented investor confidence, contributing to the rally. Meanwhile, a sharp decline in global oil prices provided a strong tailwind to the market, which eased concerns over external account pressure and inflationary risks. The drop in crude acted as a catalyst for cyclical plays, amplifying buying interest, Topline added.

Overall trading volumes increased to 1.20 billion shares compared with Tuesday’s total of 453.2 million. The value of shares traded during the day stood at Rs63 billion.

Shares of 489 companies were traded. Of these, 395 jumped, 67 declined and 27 remained unchanged.

Hascol Petroleum was the volume leader with trading in 103.5 million shares, gaining Rs1.14 to close at Rs22.69. Foreign investors sold shares worth Rs330.6 million, the National Clearing Company reported.