PSX Surges Nearly 4,000 Points as Geopolitical Hopes Fuel Historic Rally

A wave of optimism swept the Pakistan Stock Exchange (PSX) on Wednesday as easing geopolitical tensions and shifting political dynamics in Washington following the U.S. midterm elections boosted investor confidence. The benchmark KSE-100 Index surged 3,994.62 points, or 2.38%, to close at 172,013.48—clearing another major milestone and recording one of its strongest single-session gains in recent months.

The market opened on a firm footing, with the index climbing 1,707.48 points, or 1.02%, to 169,726.34 by 10:04 a.m. Momentum accelerated as international oil prices declined, with investors weighing the implications of the U.S. midterm results against uncertainty regarding Washington’s next steps in the Iran conflict. The combination of softer crude prices and hopes for a diplomatic thaw provided a constructive backdrop for equities.

“Institutional buying, anticipation of a shift in the U.S. political landscape after the midterms, reports of a draft proposal between the U.S. and Iran, and relatively stable oil prices around $103 a barrel all fueled the market’s positive momentum,” said Sana Tawfik, Head of Research at Arif Habib Limited. She noted that investors are closely monitoring geopolitical developments, particularly the midterm results, which signaled a shift in the balance of power in Washington.

Internationally, Brent crude futures fell $1.75, or 0.7%, to $101.85 a barrel, after an earlier drop of $2. Similarly, U.S. West Texas Intermediate (WTI) crude futures declined $1.18, or 1.2%, to $94.91 a barrel, reversing an earlier gain.

Ahmed Sheraz, an equity trader at KASB KTrade, observed that the PSX staged a remarkable recovery, with the KSE-100 closing at 172,013—up 3,995 points, or 2.38%. Trading activity was robust, with 371 million shares changing hands, reflecting a broad-based improvement in sentiment.

The rally was led by banking, fertilizer, and power stocks, with United Bank Limited, Fauji Fertilizer, and Hub Power Company emerging as the top contributors to the index’s advance. Strong participation across these sectors underscored the widespread recovery in investor trust, Sheraz added.

On the global front, easing oil prices—with Brent hovering between $102 and $104 per barrel—further supported sentiment. Additionally, signals from the U.S. administration that no immediate military strike against Iran was planned, alongside ongoing diplomatic efforts, raised hopes of de-escalation in the Middle East.

Meanwhile, the U.S. midterm elections yielded significant gains for the Democrats, who secured control of Congress. “Going forward, easing oil prices and improving geopolitical sentiment could keep the outlook constructive, although developments in the Middle East will remain the key driver of market direction,” Sheraz predicted.

Cumulatively, trading volumes jumped to 841.6 million shares from Tuesday’s 517.3 million. The value of traded shares stood at Rs35.4 billion.

Shares of 499 companies traded in the ready market. Of these, 368 advanced, 103 declined, and 28 remained unchanged.

TPL Properties led volumes with 67.9 million shares traded, gaining Re0.68 to close at Rs12.67. Foreign investors were net sellers, offloading shares worth Rs1.16 billion, according to the National Clearing Company.

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