The Pakistan Stock Exchange (PSX) kicked off the week on a positive note, gaining over 1,700 points during intraday trading as global oil prices continued to decline due to ongoing tensions between the United States and Iran. The benchmark KSE-100 index had risen by 2273.78 points from its previous close of 176,094.11 points at 11am on Monday.
By 2:18pm, however, the gains had dropped to 1781.72 points as investors took cues from easing geopolitical tensions following Donald Trump’s announcement that talks with Iran would resume later in the day. The positive momentum was attributed to investor optimism driven by expectations of a swift agreement between the US and Iran.
According to Mettis Global, a web-based financial portal, the development came as “investors took cues from easing geopolitical tensions after Trump called off a planned strike on Iran, reducing immediate concerns over a wider regional conflict.” The positive sentiment was further fueled by the return of inflation to single digits in July, with data due to be released today, which would provide an additional catalyst for the market.
Awais Ashraf, director of research at AKD Securities, noted that “sentiment improved after Trump announced that talks with Iran would resume on Monday, without setting a deadline for reaching an agreement following the cessation of hostilities.” The return of inflation to single digits in July is expected to strengthen expectations of monetary easing and boost investor confidence.
The KSE-100 index ended its first month of the current fiscal year lower by 4,208 points or 2.3% month-on-month as escalating US-Iran tensions pushed global crude oil prices higher, weighing on investor sentiment. Average daily traded volume during July stood at 845 million shares, while average daily traded value was Rs37.5 billion.
The positive start to the week sets a promising tone for investors ahead of the upcoming earnings season, which is expected to be impacted by ongoing US-Iran tensions and potential changes in global economic policies. As one analyst noted, “the calm before the storm” could lead to increased volatility as market participants adjust to the new reality.
Source: Dawn
Based on reporting from Dawn.
