Stocks extended gains on Thursday as stabilising oil prices eased fears of worst-case supply shocks, and investors shifted focus to the upcoming corporate earnings season.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index closed at 178,123.56, up 2,837.78 points, or 1.62%, from the previous close of 175,285.78.
During the session, it touched an intraday high of 178,431.73, up 3,145.95 points, or 1.79%, while its low stood at 175,672.33, still up 386.55 points, or 0.22%. “Markets took a breather as oil prices stabilised after an initial spike, easing investor concerns over potential worst-case supply shocks, similar to those during past US-Iran tensions,” said Huzaifa Riaz, Director at Mayari Securities (Pvt) Limited.
“On the domestic front, attention is shifting to the upcoming earnings season, which is expected to drive sector-specific activity,” he added.
The positive start followed a strong recovery in the previous session. The Pakistan Stock Exchange closed higher on Wednesday as the KSE-100 Index gained 1,766.97 points, or 1.02%, to settle at 175,285.78.
Oil prices edged higher again on Thursday after more overnight US strikes on Iran, with hostilities escalating in the Middle East in recent days as Washington launched attacks on Iran and Tehran hit US bases in Kuwait and Jordan.
Brent crude futures were 0.7% higher in London at $84.50 a barrel and up roughly 11% for the week so far.
The renewed hostilities have kept investors focused on the conflict, oil prices and their potential implications for global interest rates.
European markets edged lower on Thursday after volatility in Asia’s tech-heavy indexes, while benign US inflation data helped keep the dollar and government bond yields under control.
Despite stronger-than-expected results from Taiwanese chip giant TSMC, South Korea’s KOSPI fell 6% as doubts deepened over the sustainability of the AI-led rally. Japan’s Nikkei also declined sharply, while Europe’s STOXX 600 moved lower.
Wall Street futures pointed to a broadly steady restart for major US indexes after gains on Wednesday, as investors rotated back into major technology stocks and banks following strong earnings from large lenders.
Soft US producer price data for June, following benign consumer inflation figures a day earlier, also eased immediate fears of a US rate hike. Traders cut pricing on a rate hike this month to around 10%, compared with as high as 43% in recent weeks. However, analysts warned that the pullback in inflation fears could prove temporary if oil and gas prices continue rising because of renewed Middle East hostilities.