Pakistan Stocks Rebound as Investor Sentiment Improves

The Pakistan Stock Exchange (PSX) experienced a significant rebound on Wednesday, with its benchmark KSE-100 index surging over 2,500 points during intraday trading. This recovery ended a two-day losing streak that had seen substantial investor losses. The index initially jumped 3,133 points before settling to a gain of 2,664.88 points. Analysts attributed the positive turn to a shift in investor sentiment, influenced by U.S. President Donald Trump's decision to replace a proposed 20% toll on Strait of Hormuz traffic with investment commitments from GCC countries. Additionally, lower-than-expected U.S. inflation eased concerns about further Federal Reserve rate hikes, improving the outlook for capital flows into frontier markets like Pakistan and reducing pressure on the Pakistani rupee. The market had faced extreme selling pressure the previous day, with investors losing billions amid panic over geopolitical developments and rising oil prices following Trump's initial announcement regarding the Strait of Hormuz. Oil prices continued their upward trend on Wednesday, with Brent futures climbing 1.2% and West Texas Intermediate futures gaining 0.8%, influenced by ongoing tensions in the Middle East.

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investor sentiment had “turned positive” after United States President Donald Trump replaced the proposed 20 per cent toll on Strait of Hormuz traffic with investment commitments from GCC countries.