The Pakistan Stock Exchange (PSX) rallied sharply on Wednesday, with the benchmark KSE-100 Index gaining over 4,000 points as investor sentiment strengthened on optimism surrounding potential US-Iran talks.
US President Donald Trump has said negotiations between US and Iranian officials could resume in Pakistan in the next two days and Vice President JD Vance, who led weekend talks last week that ended without a breakthrough, said he felt positive about where things stood.
“I think you’re going to be watching an amazing two days ahead,” Trump told ABC News reporter Jonathan Karl, adding he did not think it would be necessary to extend a two-week ceasefire that ends on April 21.
KSE-100 index, the benchmark of the PSX, surged to 170,179.03 points after registering a rise of 4,544.19 points or 2.74%, up from the previous close of 165,634.84 points.
Ahfaz Mustafa, CEO of Ismail Iqbal Securities, told Geo.tv: “The expectations of the Middle East conflict resolving by the weekend, and lower oil prices have given new confidence to investors.”
“This, coupled with Saudi deposits, and an overall feel-good sentiment due to Pakistan taking centre stage, is fueling the rally,” the analyst added.
Arif Habib’s Ahsan Mehnti said that the stocks staged a sharp recovery as investors weighed a second round US-Iran peace talks and Trump affirmed that the war was very close to being over.
“Surging global equities, $3bn expected receipt for financial support from KSA played catalyst role in bullish activity at PSX,” he added.
Saudi Arabia will provide $3 billion in additional support for Pakistan to help the South Asian nation bridge a multibillion-dollar gap in its finances linked to an upcoming debt repayment to the United Arab Emirates.
The extra funding for Pakistan comes on top of Riyadh extending the rollover arrangement for an additional $5 billion deposit for a longer period, Pakistan Finance Minister Muhammad Aurangzeb told reporters in Washington.
Under Pakistan’s $7 billion IMF programme, the country is targeting foreign exchange reserves of more than $18 billion by June.
“Senator Aurangzeb said this support comes at a critical time for Pakistan’s external financing needs and would help reinforce foreign exchange reserves and strengthen the country’s external account,” the finance ministry said in a statement.
