Karachi: The Pakistan Stock Exchange (PSX) recorded a strong rally on Wednesday, with its benchmark KSE 100 Index crossing the 170000 point threshold as investors responded to political developments in the United States and hopes of a diplomatic breakthrough in the ongoing conflict with Iran.
According to PSX data, the index reached 170771.98 points by 1:40 pm, up 2753.12 points, or 1.64 per cent, from Tuesday's close of 168018.86.
The market opened positively, with the index climbing 1707.48 points to 169726.34 by 10:04 am. Buying accelerated during the session, pushing the benchmark above 170000.
US election results influence investor sentiment
The rally followed the Democratic Party's victory in the US midterm elections, which saw it secure control of both chambers of Congress, ending the Republican Party's hold under President Donald Trump.
Investors were considering whether Washington's shifting political balance could affect US policy toward Iran and open the door to renewed diplomatic negotiations.
Market sentiment was also supported by expectations that progress towards resolving the conflict could ease regional uncertainty and ease pressure on international energy markets.
The prospect of reduced geopolitical tensions encouraged investors to increase their exposure to Pakistani equities, although the direction of future US policy remains uncertain.
Buying spreads across major sectors
Wednesday's gains were supported by buying across several sectors, including commercial banks, cement, fertilisers, chemicals, pharmaceuticals, automobile assemblers, power generation, oil and gas exploration, and refineries.
The rally extended Tuesday's positive performance, when the KSE 100 gained 1454.80 points, or 0.87 per cent, to close at 168018.87.
Tuesday's advance was driven largely by declining international crude oil prices and expectations of negotiations between Washington and Tehran.
Market activity also strengthened on Tuesday, with trading volume rising 16.67 per cent to 517.35 million shares, while traded value increased to Rs 20.7 billion.
The market's total capitalisation rose to approximately Rs 18.4 trillion.
Oil prices and geopolitical uncertainty remain concerns
Despite the improvement in equity markets, international oil prices rebounded on Wednesday as investors continued to monitor developments in the Iran conflict.
Brent crude futures rose to approximately USD 104.42 per barrel, while US West Texas Intermediate crude traded near USD 96.59.
The recovery reflected ongoing concerns about potential supply disruptions and uncertainty over shipping through the Strait of Hormuz.
Analysts warned that Pakistani equities could remain volatile as developments in US Iran relations and international energy markets continue to affect investor confidence.
The KSE 100's move above 170000 marks a significant intraday gain, although the rally's sustainability will depend on geopolitical developments, oil prices and continued buying activity.
