Market Recovers from Record Drop
The Pakistan Stock Exchange (PSX) staged a dramatic recovery on Tuesday, with the benchmark KSE-100 Index skyrocketing 6.62%—its second-highest single-day gain—after a historic plunge just one session prior. The index closed at 156,177.12 points, a staggering increase of 9,696.98 points from Monday’s close of 146,480.14.
Drivers of the Rally
Analysts attributed the sharp rebound to a significant drop in global oil prices and a positive shift in regional market sentiment. “Market is rebounding due to lower oil prices and improving sentiment in regional markets,” said Samiullah Tariq, Head of Research at Pak-Kuwait Investment Company. Topline CEO Mohammad Sohail noted that the sharp decline in crude prices prompted investors to aggressively buy local stocks.
Volatile Trading Session
The trading day was marked by extreme volatility:
- The index hit an intraday high of 158,354.12, up 8.12%.
- It recorded a low of 155,294.65, still up 6.02%.
- Trading was temporarily suspended after the KSE-30 Index triggered a market-wide circuit breaker by falling more than 5% from the previous close.
Global Oil Price Shock and Recovery
The rally followed a dramatic reversal in oil markets. After surging past $100 a barrel on Monday to their highest levels since mid-2022, crude prices plummeted on Tuesday. Brent futures fell 4.2% to $94.79 a barrel, while US West Texas Intermediate crude dropped 4% to $90.96.
The price drop came after US President Donald Trump predicted a potential de-escalation in the Middle East conflict, easing concerns about prolonged disruptions to global oil supplies. This sentiment was reinforced by reports of diplomatic communications between Russian President Vladimir Putin and Trump regarding a quick settlement to the Iran war.
Regional and Global Market Impact
The positive sentiment extended across Asian markets, with South Korea’s Kospi gaining over 5% and Japan’s Nikkei 225 rising 2.9%. Advances were also seen in Hong Kong, Shanghai, Sydney, Singapore, and other major Asian exchanges. The rally followed a recovery on Wall Street, where all three main indexes reversed early losses to close sharply higher on Monday.
Tuesday’s surge provided much-needed relief to investors after Monday’s devastating session, when the KSE-100 had shed 11,015.96 points in its second-largest single-day drop ever. The dramatic turnaround highlights the Pakistani market’s acute sensitivity to global energy prices and geopolitical developments.
