ISLAMABAD: Pakistan’s benchmark stock index extended gains on Thursday, closing nearly 900 points higher as falling oil prices and optimism surrounding a US-Iran peace agreement improved investor sentiment and strengthened expectations for the country’s economic outlook.
The gains came as Pakistan formally signed as mediator the Islamabad Memorandum of Understanding between the United States and Iran, a framework agreement aimed at ending months of conflict, reopening the Strait of Hormuz and launching 60-day negotiations on Iran’s nuclear program, sanctions relief and other outstanding disputes.
The prospect of easing tensions in the Middle East has helped push international oil prices lower after months of volatility linked to the conflict. For Pakistan, a major energy importer, lower oil prices could ease pressure on inflation, fuel import costs and the external account, factors closely watched by investors.
“The upward momentum was primarily fueled by the continued decline in international crude oil prices, which improved the macroeconomic outlook and strengthened investor confidence,” Topline Securities said in its daily market review.
The brokerage also linked the rally to the US-Iran agreement.
“Further supporting sentiment was growing optimism surrounding the anticipated signing of a peace agreement MoU between Iran and the USA,” it said, adding that the development had “raised hopes of easing geopolitical tensions in the region, encouraging risk-taking activity and broad-based buying across key sectors.”
The KSE-100 Index rose 887 points, or 0.49 percent, to close at 181,398 points after reaching an intraday high of 1,358 points.
According to Topline, index heavyweights Hub Power Company, Service Industries, Fauji Fertilizer Company, Engro Holdings and Pakistan Petroleum were the biggest contributors to the benchmark’s gains, collectively adding 679 points.
Trading activity remained robust, with more than 1.24 billion shares changing hands and turnover reaching Rs58 billion ($206 million), reflecting what the brokerage described as broad-based investor participation. Kohinoor Spinning Mills Limited led volumes with 230 million shares traded.
