KARACHI: The Pakistan Stock Exchange (PSX) staged a robust recovery rally on Monday amid hopes for a revival of peace talks between the United States and Iran.
As a result, oil prices retreated sharply, easing fears of a spike in inflationary pressures in countries, especially Pakistan, that rely on energy imports via the Strait of Hormuz. Strong buying interest across the board pushed the benchmark index towards the 179,000point level during intraday trading.
Topline Securities Ltd said bulls firmly dominated the trading session, fuelled by optimism about the prospect of renewed diplomatic talks between Washington and Tehran. Easing geopo-litical concerns pushed international oil prices sharply lower, boosting investor sentiment and triggering broad-based buying across key sectors.
The benchmark KSE100 index remained in positive territory through-out the session, climbing to an intraday high of 2,891 points at 178,985.95 before settling at 178,200.02, up 2,105.91 points or1.20 per cent.
The rally reflected renewed risk appetite as investors welcomed signsof easing regional tensions and softer energy prices.
On the macroeconomic front, Consumer Price Index-based inflation decelerated to 9.20pc in July from 11.07pc in June.
The lower-than-previousmonth inflation readingfurther strengthened investor confidence.
Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said the market turned bullish, primarily driven by improving investor sentiment following a relative calm on thegeopolitical front.
Fauji Fertiliser, Meezan Bank, Lucky Cement, Pakistan Petroleum, Engro Holdings, Habib Bank, Oil and Gas Development Company, Hub Power, Systems Ltd, and PSO were the top contributors, collectively adding 1,199 points to the benchmark.
Investor participation, however, weakened as the traded volume dipped 10.85pc to 785 million shares. The turnover value, however, surged 32.14pc to Rs33.14 billion.
Trust Brokerage topped the volume chart with 113 million shares traded.
Analysts hoped that easing geopolitical tensions, moderating inflation, and improving macroeconomic indicators would support positive investor sentiment.
Nevertheless, developments on the geopolitical front, the ongoing corporate earnings season, and global oil price movements will remain key drivers of market direction in the near term.