KARACHI:

Renewed investor optimism lifted the Pakistan Stock Exchange (PSX) on Monday, driving the benchmark KSE-100 index more than 2,100 points higher as buying momentum emerged across major sectors following a sharp decline in international oil prices.

The benchmark KSE-100 Index settled at 178,200.02, gaining 2,105.91 points, or 1.20%, from the previous close of 176,094.12. The market started off trading strongly, with the index soaring to 178,836.99 by 9:34am, up 2,742.88 points (1.56%), before surrendering part of its gains later in the session. It touched an intraday high of 178,985.95, while the day’s low stood at 177,759.88.

Buying remained broad-based throughout the session, with commercial banks, oil marketing companies, cement, fertiliser, oil and gas exploration companies and power generation stocks leading the advance and underpinning the market’s positive performance.

Investor sentiment improved after international crude oil prices fell by more than $4 a barrel on Monday as US President Donald Trump refrained from launching a fresh attack on Iran, opting instead to pursue a diplomatic agreement aimed at curbing Tehran’s nuclear ambitions and reopening the Strait of Hormuz.

Additionally, the easing geopolitical tensions prompted a retreat in oil prices during Asian trading, easing concerns over potential disruptions to global energy supplies and improving appetite for risk assets. The favourable external backdrop spilled over to the local bourse, helping sustain buying interest across index-heavy sectors and enabling the market to begin the week on a firm footing.

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KTrade Securities observed that the PSX extended its gains on Monday, with the benchmark KSE-100 index closing at 178,200 points, up 2,106 points, or 1.20%, from the previous session, as easing geopolitical tensions in the Middle East boosted investor confidence.

The brokerage noted that trading activity remained moderate, with benchmark volumes reaching 255 million shares, while the rally was broad-based, with 79 of the 100 index constituents ending the session in positive territory.

According to KTrade, investor sentiment strengthened after the latest signs of de-escalation between the United States and Iran triggered a sharp decline in global oil prices. Brent crude fell about 4.5% to slightly above $83 per barrel after Iranian Foreign Minister Abbas Araghchi said discussions between Tehran and Oman on the management of the Strait of Hormuz were in their final stages.

Among individual stocks, Fauji Fertiliser, Meezan Bank, Lucky Cement, Pakistan Petroleum and Engro Holdings were the largest contributors to the index’s advance. Sector-wise, commercial banks, investment banks, cement and fertiliser companies provided the strongest support to the market.

Looking ahead, KTrade said investors are expected to keep a close watch on geopolitical developments, noting that progress towards a US-Iran agreement could provide further support to market sentiment, while any renewed escalation may encourage a more cautious investment stance.

Overall, trading volume decreased to 785.3 million shares from 880.9 million recorded on Friday. The value of traded shares stood at Rs33.1 billion.

In the ready market, shares of 493 companies were traded. Of these, 305 stocks closed higher, 152 fell and 36 remained unchanged. Trust Brokerage was the volume leader with trading in 113.4 million shares, losing Rs0.06 to close at Rs2.51.

Meanwhile, the Pakistan Bureau of Statistics released inflation data showing July headline inflation dropped to 9.2% from 11.1% a month ago.