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KARACHI: The Pakistan Stock Exchange (PSX) closed on a bullish note on Wednesday, with the benchmark index adding around 7,000 points, amid improved investor sentiment due to easing tensions in the Middle East and a sharp decline in global oil prices.
The benchmark KSE-100 index surged to 171,704.75 points after jumping by 6,962.28 points or 4.23%, up from the previous close of 164,742.47 points.
The index traded between an intraday high of 172,088.58 and a low of 167,354.44 during today's session.
Ahfaz Mustafa, CEO of Ismail Iqbal Securities, told Geo.tv that President Trump's social media post about pausing "Project Freedom" was a major reason for the rise.
Oil prices followed the announcement, he noted, adding that the "subsequent news of America and Iran being very close to reaching a final agreement […] buoyed the investors".
"Now, expectations of lower inflation due to lower oil prices will be built in, and investors are adjusting their positions accordingly," Mustafa added.
Oil prices fell for a second day on Wednesday on expectations of bottled up supply from the key Middle East producing region could resume flowing after US President Donald Trump indicated a possible peace deal may be reached to end the war with Iran, according to a report by Reuters.
Brent crude futures for July fell $1.52, or 1.38%, to $108.35 per barrel as of 0103 GMT, after dropping 4% in the previous session. US benchmark West Texas Intermediate futures for June declined $1.50, or 1.47%, to $100.77, after closing down 3.9% the day before.
The decline in global oil prices came a day after Trump said he would briefly pause an operation to help escort ships through the Strait of Hormuz after a request from Pakistan and other countries.
In another report, Reuters, citing a source, said that the US and Iran were closing in on an agreement on a one-page memorandum to end the war in the Gulf.
The source said a report earlier by the US media outlet Axios on the proposed memorandum was accurate, it added.
The one-page, 14-point memorandum of understanding was being negotiated between US envoys Steve Witkoff and Jared Kushner and several Iranian officials, both directly and through mediators, Axios said.
In its current form, the memorandum would declare an end to the war in the region and the start of a 30-day period of negotiations on a detailed agreement to open the strait, limit Iran's nuclear programme and lift US sanctions, Axios added.
Iran's restrictions on shipping through the strait and the US naval blockade of Iran would be gradually lifted during that 30-day period, Axios said, citing one US official who added that if the negotiations collapsed, US forces would be able to restore the blockade or resume military action.
