On Friday, the Pakistan Stock Exchange (PSX) experienced a notable surge in buying activity following a de-escalation of tensions between Iran and Pakistan.
The benchmark KSE-100 initially soared by over 700 points during the opening hours but later retraced slightly to 63,628.32, showing a gain of 425.92 points or 0.67%. This followed an intra-day high of 63,911.85.
Various sectors, including automobile assemblers, commercial banks, cement, chemicals, oil and gas exploration companies, as well as oil marketing companies and refineries, witnessed across-the-board buying.
Analysts linked the buying spree to the easing cross-border tensions between Iran and Pakistan. Additionally, positive sentiments were fueled by the prospects of resolving the circular debt issue in the energy sector.
Samiullah Tariq, Head of Research at Pak Kuwait Investment Company Limited, highlighted the positive impact of the settlement plan for circular debt in public sector companies. The innovative plan, reportedly shared with caretaker Finance Minister Dr. Shamshad Akhtar, aims to be budget-neutral and leakage-free, settling a total of Rs 1.268 trillion.
The preceding day, escalating regional tensions had led to a dip in investor sentiment, resulting in the benchmark KSE-100 index closing at 63,202.40 with a decrease of 364.93 points or 0.57%. Pakistan had conducted precision military strikes against alleged terrorist hideouts in the Siestan-o-Baluchistan province of Iran, responding to earlier missile strikes on Pakistani territory by Iran.
Globally, Asian shares rebounded on Friday, with a 0.9% rally in MSCI’s broadest index of Asia-Pacific shares outside Japan. This recovery was attributed to a surge in regional chipmakers.
Despite the Friday rebound, the index was down 2.9% for the week, marking the largest weekly loss since mid-August. Additionally, the yen faced heavy losses for the week as investors scaled back expectations of the Bank of Japan abandoning its accommodative monetary policies soon.
