PSX opens week in the green, gains more than 5,000 points during intraday trade

Lead

The Pakistan Stock Exchange's (PSX) benchmark KSE-100 index started the week on a strong note, gaining more than 5,000 points during intraday trading on Monday. By 9:50am, the index had added 4,501.33 points to reach 175,522.53 points, and by 10:30am it had climbed 5,068.88 points to 176,090.08 points, according to Dawn.

Coverage Comparison

Dawn's reporting tracked the index's steady ascent throughout the day. By 2:13pm, the index had gained 6,289.50 points to hit 177,310.70 points, and by 3:09pm it had crossed the 178,000-point level with a gain of 7,081.19 points. One report noted that the index opened the week gaining more than 7,000 points, while another stated that it settled at 178,123.56 points, up 2,837.78 points (1.62 per cent).

Key Claims

Investor sentiment improved after the US and Iran paused military strikes, raising hopes for a diplomatic resolution to the Middle East conflict and the resumption of shipping through the Strait of Hormuz, said Awais Ashraf, director of research at AKD Securities. He also noted that the easing of geopolitical tensions increased the likelihood that the State Bank of Pakistan (SBP) would maintain the policy rate in its monetary policy announcement.

"We expect the SBP to adopt a cautious stance and keep the policy rate unchanged at today's Monetary Policy Committee meeting, as it is likely to assess further developments in the Middle East and the economic impact of the recent flood situation," Ashraf said. He added that the ongoing "disinflationary trend, a comfortable external account position, weakening leading economic indicators, and a contraction in money supply continue to support the case for monetary easing in the coming months."

The SBP indeed maintained the policy rate at 11.5 per cent, as reported by Dawn. Analysts had expected the central bank to hold rates steady, citing the difficulty of maintaining macroeconomic stability amid sluggish growth.

Mettis Global, a web-based financial portal, attributed the rally to "easing geopolitical tensions and a sharp decline in global oil prices," saying it improved investor sentiment. Topline Securities Ltd said the rise was driven by broad-based buying and improved investor sentiment, which fuelled a strong market-wide rally, and added that investors took advantage of attractive valuations following the partial easing of last week's concerns.

Iran and the US held their fire on Monday, handing Gulf shipping and the oil industry a respite from missile strikes as Donald Trump's UN envoy said the president was "giving talks some space." Oil prices tumbled on Monday as investors breathed cautious sighs of relief at the pause in combat; the price of North Sea Brent crude shed more than seven per cent at one point early on Monday to briefly drop back below $90, while US counterpart West Texas Intermediate also fell.

Perspectives

Awais Ashraf, AKD Securities: The easing of geopolitical tensions and the prospect of a steady policy rate improved investor sentiment and supported the case for eventual monetary easing.

Mettis Global: The rally was driven by easing geopolitical tensions and a sharp decline in global oil prices.

Topline Securities Ltd: Broad-based buying and improved investor sentiment drove the market-wide rally, with investors capitalizing on attractive valuations.

State Bank of Pakistan: The central bank maintained the policy rate at 11.5 per cent, reflecting a cautious stance amid ongoing uncertainties.