PSX buoyed by hopes of near-term resolution to war

The Pakistan Stock Exchange (PSX) staged a sharp rise as investor sentiment improved following remarks by US President Donald Trump signalling a near-term resolution to the Iran conflict, alongside a broader rally in global equities.

The benchmark KSE-100 index gained 7,461.58 points or 5.02% to jump to 156,204.89 points, up from the previous close of 148,743.31 points.

Meanwhile, trading at the Pakistan Stock Exchange was temporarily halted after the KSE-30 index remained above the 5% threshold for five consecutive minutes, triggering an automatic market suspension mechanism.

During the rally, the benchmark KSE-100 index was up by 7,462 points in intraday trade, reflecting strong bullish momentum across the board. Trading will resume at 1:09pm.

Trump has said that the US could leave Iran “within two weeks, maybe two weeks, maybe three”, while US Secretary of State Marco Rubio said Washington could hold direct talks with Iran at some point, signalling a potential diplomatic opening.

China and Hong Kong stocks joined a global relief rally on Wednesday, and the yuan firmed against the dollar after Trump signalled an end to the Iran war that had roiled markets. Japan’s Nikkei 225 jumped 4% while benchmarks in and Seoul also rose.

“Remarks by the US President signalling a potential near-term resolution to the ongoing conflict, coupled with a concurrent rally across US equity markets subsequently mirrored in Asian trading sessions, have materially bolstered investor confidence,” said Ahfaz Mustafa, Chief Executive Officer of Ismail Iqbal Securities.

“A scheduled address by the President to the nation this evening is further underpinning sentiment, with markets widely anticipating a constructive announcement. Compressed valuations across risk assets are adding an additional layer of appeal, drawing bargain-hunting investors who are positioning ahead of an expected de-escalation and a consequent normalisation in crude oil prices.”

Meanwhile, Ahsan Mehanti, Managing Director and Chief Executive Officer of Arif Habib Commodities, said: “Stocks staged sharp recovery on Trump affirming US military forces will leave Iran soon, stating that his goal of eliminating the country’s nuclear threat has been achieved.”

“Surging global equities, upbeat data on remittances, FX reserves and pivotal role in securing crude supplies, peace talks to resolve Middle East conflict played catalyst role in bullish activity at PSX,” he added.