PSX Builds Bullish Momentum as U.S. Election Outcomes Temper Middle East Tensions

The Pakistan Stock Exchange extended its winning streak on Thursday as sweeping Democratic gains in the U.S. congressional elections raised hopes of a de-escalation in the U.S.-Israel war on Iran and eased pressure on Middle East energy supplies.

According to data available on the PSX website, the KSE-100 index climbed 4,591.02 points, or 2.67 percent, during the opening minutes of trading to reach 176,604.51 points.

However, the index lost some of its early gains as the session progressed and closed at 175,379.86, up by 3,366.38 points or 1.96 percent from the previous close.

The rally was driven by broad-based buying interest, with gains recorded across apparel, automobile assemblers, auto parts and accessories, cement, chemicals, commercial banks, exchange-traded funds, fertilisers, glass and ceramics, insurance, pharmaceuticals, oil and gas exploration, and oil marketing companies.

Thursday’s gains followed a strong rally on Wednesday, when an 8 percent decline in international oil prices and easing geopolitical concerns following the U.S. midterm elections encouraged widespread buying across the market.

The KSE-100 index had advanced 3,994.62 points, or 2.38 percent, on Wednesday to close at 172,013.48 points, setting the stage for another bullish opening on Thursday.

The buying followed major political developments in the United States, where voter dissatisfaction with President Donald Trump’s policies, particularly the rising cost of living linked to the war with Iran, helped Democrats secure control of the Senate.

Democrats flipped seats in traditionally Republican states to secure a Senate majority of at least 54-44, while also gaining at least 30 seats in the House of Representatives.

The election outcome raised expectations that political pressure on the Trump administration could reduce the likelihood of further military escalation in the Middle East and improve prospects for restoring energy flows from the region’s major oil and gas producers.

International oil markets reacted sharply, with Brent crude futures plunging nearly 9 percent overnight to fall below $100 per barrel.

Brent has declined approximately 20 percent so far this week. If the losses persist through Friday’s close, it would mark the largest weekly fall in oil prices since April 2020, when U.S. crude futures briefly traded below zero.

On Thursday, Brent futures fell 80 cents, or 0.85 percent, to $93.82 a barrel as of 0426 GMT, while U.S. West Texas Intermediate crude futures were down $1.2, or 1.36 percent, to $86.92.

Global equity markets also responded to the election results, although performance varied across sectors and regions.

Wall Street’s S&P 500 Index closed 1.6 percent higher, while European shares reached a two-month high as investors welcomed the clearer political outlook and the possibility of reduced geopolitical tensions.

In Asia, however, technology and semiconductor stocks came under pressure. South Korea’s KOSPI Index fell 4 percent, approaching a seven-month low, while Taiwan’s benchmark index declined 1.8 percent.

Japan’s Nikkei slipped 0.5 percent, weighed down by technology equipment suppliers, while the U.S. dollar also faced selling pressure.

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