Pakistan stocks jumped at the open on Monday, with the benchmark KSE-100 Index rising nearly 4,400 points in early trading, as investor sentiment strengthened after reports of a peace agreement between the US and Iran.
By 9:35am, the benchmark index was hovering at 176,767.01, up 4,367.11 points, or 2.53 per cent.
Buying was seen across major sectors, including commercial banks, fertiliser, cement, oil and gas exploration companies, oil marketing companies and refineries. Index-heavy stocks such as DG Khan Cement, Lucky Cement, HBL, MCB, Meezan Bank, Mari Energies, OGDC, PPL, POL and Hubco traded in the green.
The rally came after the market closed the previous week with modest gains despite sharp volatility. The KSE-100 had risen 1,921 points, or 1.13pc, on a week-on-week basis to settle at 172,399.90 points, even after briefly slipping below the 170,000-point mark. Analysts had attributed that recovery to easing tensions between the US and Iran and falling international oil prices, which helped revive risk appetite.
Asian stock markets also rose on Monday, while the dollar weakened and oil prices fell, as the reported agreement between Washington and Tehran raised hopes of reduced geopolitical tensions and lower global inflationary pressure.
Prime Minister Shehbaz Sharif said on social media early on Monday that a deal had been reached, while US President Donald Trump said the agreement included the opening of the strategically vital Strait of Hormuz, though he did not provide further details.
Trump is expected to meet Middle Eastern leaders and take part in a working session with Ukrainian President Volodymyr Zelenskiy during the G7 summit in France this week.
Iran, meanwhile, said traffic through the Strait of Hormuz would be regulated jointly by Tehran and Oman, raising questions about future shipping arrangements through one of the world’s most critical oil transit routes.
The reported breakthrough was seen as a relief for central banks due to meet this week, as lower oil prices could ease pressure on policymakers worried about a fresh rise in inflation driven by energy costs.
Brent crude fell 4% to $83.80 a barrel, moving further away from its May peak of $126.41. US crude dropped 4.7% to $80.89 a barrel, although it remained above the $67 level at which it was trading before the conflict began.
Sold most of my stocks and took hefty profit. To me winds might change the direction.