PSX gains on US-Iran deal hopes, lower oil prices

The equity market traded higher on Friday as hopes of a possible US-Iran deal and lower oil prices lifted sentiment, while investors awaited the federal budget for cues on the market's longer-term direction.

During the session, the Pakistan Stock Exchange's benchmark KSE-100 Index touched an intraday high of 171,692.23, gaining 1,988.63 points, or 1.17%, and a low of 170,946.54, reflecting an increase of 1,242.94 points, or 0.73%, from the previous close of 169,703.60.

"Trump's statement that strikes are being delayed as the deal is near drives the sentiment positive. Lower oil prices increase the stock market on a daily basis. Purely sentiment play," said AAH Soomro, an independent investment and economic analyst. 

"Today's budget is very important for the long-term direction," said AAH Soomro, an independent investment and economic analyst.

Asian stocks gained and oil prices dipped on Friday after US President Donald Trump withdrew his threat of further strikes on Iran and said a deal could be signed in the coming days.

Iran's position remained unclear, however, with Foreign Ministry spokesperson Esmaeil Baqaei saying Tehran "had not reached a final conclusion on the agreement".

Trump's comments fuelled a global stock market rally and pushed oil prices lower, reviving hopes that a resolution may be nearing in the war triggered by US-Israeli strikes in February.

Trump said talks with Iran had been "brought to the highest level of Iranian leadership and approved", adding that he had "cancelled the scheduled strikes and bombings against Iran this evening".

"Time and place of the signing to be announced shortly," he added.

However, Baqaei said "most of the text of the agreement was finalised, but the problem began when the US side made new demands and changed its positions".

Oil prices slipped to two-month lows on expectations of a possible agreement, with Brent crude futures dropping 1.8% to $88.76 per barrel after falling nearly 3% overnight.

Regional markets also rallied, with MSCI's broadest index of Asia-Pacific shares outside Japan jumping 3.7%, South Korea's KOSPI surging 7.8% and Japan's Nikkei rising 3.6%.

Investors were also watching the federal budget, which is set to be presented in the National Assembly on Friday with an estimated outlay of around Rs17.5 trillion.

Finance Minister Senator Muhammad Aurangzeb will present the budget for FY2026-27 before the National Assembly, with the session scheduled to begin at 3pm.

Sources told Geo News that the government is expected to set a tax revenue target of Rs15.267 trillion, while Rs7.824 trillion has been earmarked for debt servicing and the proposed defence allocation is expected to stand at Rs3 trillion.

The budget is also expected to include a plan to collect Rs1.727 trillion through the petroleum levy.

Ahead of the budget presentation, Prime Minister Shehbaz Sharif has summoned a federal cabinet meeting at Parliament House at 2:30pm to approve the proposed budget.

A day earlier, the government unveiled the Pakistan Economic Survey for FY2025-26, with Finance Minister Aurangzeb saying Pakistan recorded GDP growth of 3.7% against the envisaged target of 4.2%.

Per capita income rose to $1,901 in 2025-26 from $1,751 in the previous fiscal year, while the size of the economy in dollar terms touched $452 billion against $408 billion a year earlier.

In the previous session, the Pakistan Stock Exchange closed modestly higher as the KSE-100 Index gained 276.16 points, or 0.16%, to settle at 169,703.60 against the previous close of 169,427.44.

The index touched an intraday high of 170,138.19 and a low of 168,682.25 during Thursday's session.