PSX: buying continues, KSE-100 gains nearly 2%

Buying rally continued at the Pakistan Stock Exchange (PSX), with the benchmark KSE-100 Index gaining nearly 2% amid expectations that losses suffered by US President Donald Trump’s Republican Party in this week’s Congressional elections may reduce the risk ​of further escalation of the US-Israeli war on Iran.

The market opened on a positive note, with the index initially surging to an intraday high of 176,604.51. However, profit-taking emerged soon afterwards, triggering a sharp correction that pushed the index towards its intraday low of 174,291.25.

The benchmark subsequently staged a recovery, with buying interest emerging around midday. The index maintained an upward trajectory during the afternoon session, although trading remained somewhat volatile. It briefly gained momentum towards the final hour of trading before witnessing some late-session profit-taking.

Despite the late-session pullback, the KSE-100 managed to close firmly in positive territory, reflecting sustained buying interest and a strong recovery from its intraday lows.

At close, the KSE-100 Index settled at 175,379.86, gaining 3,366.38 points or 1.96%.

“The positive momentum was primarily driven by easing geopolitical concerns, declining international oil prices and expectations of improved global economic stability following the US midterm election developments. Buying activity remained broad-based, with key sectors, including commercial banks, cement, automobile assemblers, oil and gas exploration companies and oil marketing companies, attracting significant investor interest.” brokerage house Topline Securities said in its post-market report.

On the contribution front, UBL, LUCK, MEBL, SYS and ENGROH emerged as the leading positive contributors, collectively adding approximately 1,293 points to the benchmark index. Their performance provided substantial support to the market’s overall upward movement, Topline report said.

On Wednesday, PSX staged a strong bullish session as a sharp decline in international oil prices and easing geopolitical concerns following the US midterm elections triggered broad-based buying. The benchmark KSE-100 Index advanced by 3,994.62 points, or 2.38%, to close at 172,013.48 points.

Globally, oil, chip stocks and the dollar were under pressure ​in Asia on Thursday and just about everything else was up after US voters swept the ‌Democrats to a series of stunning midterm election wins, a result that raised hopes for an end to the US-Iran war.

Brent crude futures dived nearly 9% overnight, falling below $100 a barrel.

Brent has dropped by about 20% so far this week. If sustained ​through to Friday’s close, it would make for the largest weekly drop in oil prices since ​a week in April 2020 when US crude briefly fell into negative territory.

Tumbling energy prices ⁠encouraged a rally in bonds, which lowered yields, pulled the dollar to a one-month low of $1.1273 per euro, ​and helped stocks.

Broad stock indexes climbed on the clear outcome, with the S&P 500 closing 1.6% higher and ​European shares notching a two-month high.

Solar supply chain stocks jumped the most, in anticipation of Democrats boosting support for renewables, while shares in data centre companies and their equipment suppliers across Asia fell on expectations of tougher regulation.

South Korea’s chipmaker-heavy KOSPI slid 4% ​and in morning trade was not far from hitting a seven-month low. Taiwan’s benchmark index fell 1.8%. Tech ​equipment suppliers dragged on the Nikkei, which fell 0.5%.

Democratic data-centre opponents who campaigned, in part, on moratoriums on data centre construction ‌won ⁠stunning victories in Texas and Georgia in a sign public opinion is shifting on AI.

To be sure, most analysts think it ultimately won’t dent demand for artificial intelligence, data centres or computer chips, but do now expect at least a temporary slowdown.

Meanwhile, the Pakistani rupee continued its marginal gain against the US dollar, appreciating 0.01% in the inter-bank market on Thursday. The local unit closed the day at 276.67, a gain of Re0.03 against the greenback.

Volume on the all-share index increased to 999.81 million from 841.61 million recorded in the previous close.

The value of shares rose to Rs46.06 billion from Rs35.39 billion in the previous session.

Cnergyico PK was the volume leader with 74.00 million shares, followed by B.O.Punjab with 69.72 million shares, and K-Electric Ltd. with 61.11 million shares.

Shares of 501 companies were traded on Thursday, of which 365 registered an increase, 103 recorded a fall, and 33 remained unchanged.