KSE-100 index surges over 900 points in early trading

Buying activity returned to the Pakistan Stock Exchange (PSX) on Thursday, with the benchmark KSE-100 Index gaining more than 900 points

KARACHI: Buying activity returned to the Pakistan Stock Exchange (PSX) on Thursday, with the benchmark KSE-100 Index gaining more than 900 points in the opening phase of trading as investors showed renewed interest in major sectors and index-heavy stocks.

At around 9:50am, the KSE-100 Index was trading at 177,771.47 points, registering an increase of 925.11 points, or 0.52%, compared with the previous close.

The early-session recovery reflected improved investor sentiment, with buying emerging across several important sectors of the market. Automobile assemblers, cement companies, commercial banks, oil and gas exploration firms, oil marketing companies (OMCs), and power generation companies remained among the prominent areas attracting investor interest.

Several heavyweight stocks also contributed to the upward movement. HUBCO, MARI, OGDC, PPL, POL, PSO, HBL, MCB, MEBL and NBP were trading in positive territory during the early session, providing support to the benchmark index.

Pakistan seeks $10 billion US support facility

The positive momentum at the local bourse comes against the backdrop of a significant development on the external financing front.

Finance Minister Muhammad Aurangzeb said on Wednesday that Pakistan had formally approached the United States for a $10 billion Exchange Stabilisation Support Facility.

According to the finance minister, the proposed arrangement is not intended to function as a conventional loan or traditional credit line. Instead, the initiative is aimed at reinforcing Pakistan’s foreign exchange stability and improving investor confidence.

The move is also expected to send a positive message to international financial markets by demonstrating greater support for Pakistan’s external-sector stability.

PSX closed lower in previous session

The strong opening on Thursday followed a weak trading session on Wednesday, when the stock market came under selling pressure.

The KSE-100 Index lost 1,109.15 points, or 0.62%, to close at 176,846.36 points.

Market sentiment was affected by reports regarding discussions between the petroleum ministry and local refineries over a possible reduction in diesel prices. The development triggered selling in energy-related stocks and added pressure to the broader market.

Continued uncertainty in international energy markets also contributed to volatility, particularly among companies linked to the oil and gas sector.

Global markets regain some momentum

Meanwhile, international financial markets showed signs of stabilisation on Thursday after the US Treasury announced measures aimed at easing pressure in the government bond market.

Global bond markets steadied after a sharp rise in US Treasury yields had unsettled investors. The US Treasury said it would double the size of its buyback operations for longer-duration debt, a move intended to improve market liquidity and ease pressure on longer-term yields.

The announcement helped improve overall investor sentiment. Earlier this week, the yield on the 30-year US Treasury bond had climbed to its highest level since 2007, raising concerns about borrowing costs and financial-market stability.

The improved mood was reflected in Asian equity markets. MSCI’s broadest index of Asia-Pacific shares outside Japan and Japan’s Nikkei index each advanced around 1.2% during Thursday’s trading.

US equity futures also pointed to a firmer opening. Nasdaq futures gained 0.5%, while S&P 500 futures edged up 0.16%. In Europe, however, EUROSTOXX 50 futures slipped 0.14%.

Dollar weakens as bond yields retreat

The decline in US Treasury yields also weighed on the US dollar, which remained close to a two-and-a-half-month low against a basket of major currencies at 98.86.

The euro continued to trade near its strongest level since May 29, changing hands at approximately $1.1674.

Meanwhile, the British pound was largely stable around $1.3600, following a gain of about 0.55% in the previous session.

For Pakistani investors, developments in global bond, currency and commodity markets remain important as they can influence foreign investment flows, exchange-rate expectations and sentiment toward domestic equities.