PSX reverses historic slump with 9,697-point rally

The Pakistan Stock Exchange (PSX) rebounded on Tuesday following a sharp drop in crude oil prices and an indication from US President Donald Trump that the war in Iran “might end soon”. The benchmark KSE-100 index gained 9,697 points to close at 156,177, up 6.62% from its overnight closing of 146,480 points. Banks, fertilizer and cement sectors were the major contributors during the session. On Monday, the market shed 11,016 points, the second-largest single-day drop in the index’s history, as oil prices hit $119 in the international market. However, the market spectacularly reversed the tide on Tuesday, even leading to a halt in trading in the morning as the index jumped by more than 6%. The rally followed the State Bank of Pakistan’s decision to keep the policy rate unchanged at 10.5%, which reassured investors and revived risk appetite, according to Topline Securities. An analyst from Ismail Iqbal Securities said the benchmark index ended the session on a positive note after opening higher, as easing geopolitical tensions, declining oil prices, and the unchanged policy rate continued to support investor sentiment. At 2:10 PM Pakistan time, WTI crude oil was down 6.7% to $88.42 per barrel and Brent 6.5% to $92.56 per barrel. Oil surged past $100 a barrel on Monday, reaching the highest level since mid-2022, as supply cuts by Saudi Arabia and other producers during the expanding US-Israeli war with Iran stoked fears of major disruptions to global supplies.