Pakistan stock market rallies after trade deal with US

The Pakistan Stock Exchange (PSC) rallied on Thursday after Pakistan and its biggest trading partner, the United States, concluded a new trade deal that will likely lead to fresh inflows in key sectors, especially oil.

Since the opening bell, the benchmark KSE-100 index was in the positive territory and made a high of 140,215.22 points.

However, the stock market lost some of its gains later in the day after news emerged that an ant-terrorism court had sentenced top parliamentary leaders of the opposition Pakistan Tehreek-e-Insaf party to 10 years in prison for their involvement in the May 9, 2023, riots.

The KSE-100 index closed at 139,390.42 points, up 0.71% or 978.18 points.

The oil group led the rally with OGDC recording an appreciable gain of PKR 8.23/ share, PPL up by PKR 4.37/ share and Mari Petroleum up by PKR 12.91/share.

The main reason for this upsurge was President Donald Trump's post about the U.S.-Pakistan trade deal.

He said that the deal with Pakistan included joint development of the country's "massive" oil reserves.

The announcement came as talks continue with other nations, including South Korea, ahead of his self-imposed August 1 deadline.

"We have just concluded a Deal with the Country of Pakistan, whereby Pakistan and the United States will work together on developing their massive Oil Reserves," Trump wrote in post on his social media platform of 'Truth Social'.

"We are in the process of choosing the Oil Company that will lead this Partnership. Who knows, maybe they'll be selling Oil to India some day!" the U.S. president wrote in his post, without giving additional details of the deal.

This is a massive development for Pakistan and its financial markets as it might lead to a re-rating of the country's capital market as foreign investment trickles into the country from U.S. companies, an analyst said.