Stocks staged a sharp rebound during Monday’s session as oil prices tumbled after a pause in US-Iran strikes revived hopes of renewed ceasefire talks and relief for global energy markets.
The Pakistan Stock Exchange’s benchmark KSE-100 Index touched an intraday high of 176,378.01, up 5,356.81 points, or 3.13%, from the previous close. It hit a low of 175,153.16, still higher by 4,131.96 points, or 2.42%, during the session.
“The reversal in the market is primarily due to cooling of tensions and the potential restart of the ceasefire talks,” Ismail Iqbal Securities Chief Executive Officer Ahfaz Mustafa told Geo.tv.
He said the development had caused oil to reverse by up to 5%, giving relief to equity markets as well.
Oil prices tumbled on Monday as a pause in tit-for-tat strikes between the United States and Iran boosted hopes for a return to ceasefire efforts and negotiations on reopening the Strait of Hormuz.
Around 0230 GMT, US West Texas Intermediate was down 4.3% at $85.45 a barrel, while Brent North Sea crude fell 3.9% to $92.97 per barrel.
Both contracts had fallen more sharply earlier in the session, with Brent shedding more than 7% at one point to briefly drop below $90.
The decline came after the United States held fire over the weekend following 13 consecutive nights of attacks on Iran. US ambassador to the United Nations Mike Waltz told Fox News Sunday that President Donald Trump was “giving talks some space”.
Tehran also said it would stop retaliatory attacks on regional neighbours, giving Gulf shipping and the oil industry a respite after weeks of escalation.
The conflict had resumed this month after a fragile truce broke down, with fighting over the Strait of Hormuz disrupting diplomatic efforts between Washington and Tehran.
The flare-up later spread beyond the vital energy corridor, with Iran-backed Houthi rebels in Yemen striking Saudi vessels near the Bab al-Mandeb Strait, a key passage into the Red Sea.
Crude prices had surged during the escalation, with Brent climbing back above $100 a barrel last week for the first time since May.
However, Trump’s decision to pause further strikes and Iran’s claim of progress in talks with Oman on management of the Strait of Hormuz provided relief to investors.
Iranian foreign ministry spokesman Esmaeil Baqaei said discussions with Oman focused on “common principles and operational mechanisms” for ensuring safe shipping through the strait while respecting sovereign rights.
A report also said Pakistan was looking at resuming US-Iran peace talks following a push initiated by China.
Despite the pause in attacks, shipping through Hormuz remained subdued. Kpler data showed fewer than 10 commodity vessels passed through the strait daily during the weekend.
Ship traffic through the Bab al-Mandeb Strait also fell on Sunday after the Houthis attacked Saudi oil installations along the Red Sea coast.
The easing in oil prices helped reduce worries over a fresh inflation shock and further interest rate pressure, supporting sentiment in most equity markets.
The PSX had remained under pressure on Friday, with the KSE-100 Index falling 718.25 points, or 0.42%, to close at 171,021.20, extending the previous day’s heavy losses.
