PSX surges as ceasefire lifts investor sentiment

The Pakistan Stock Exchange (PSX) recorded a massive rally on Wednesday, with the benchmark KSE-100 index soaring by more than 12,000 points, as easing geopolitical tensions boosted investor confidence.

The KSE-100 index climbed 12,362.38 points, or 8.15%, reaching 164,035.83 points, compared to the previous close of 151,673.45. Trading was temporarily halted after the KSE-30 index rose by 5%, triggering a market pause in line with regulatory mechanisms.

The surge followed a major diplomatic breakthrough, as Donald Trump agreed to a two-week ceasefire with Iran, reportedly mediated by Pakistan. The agreement came just hours before a deadline linked to escalating tensions in the region.

Iran’s Foreign Minister Abbas Araqchi stated that Tehran would halt counter-attacks and ensure safe passage through the Strait of Hormuz, provided hostilities cease. The development significantly reduced fears of disruption to global oil supplies.

PSX falls amid rising tensions and oil price surge

Prime Minister Shehbaz Sharif also announced that leaders from both countries had been invited to Islamabad for further negotiations aimed at reaching a comprehensive settlement.

Market analysts attributed the sharp rally to improved investor sentiment driven by geopolitical de-escalation. Ahfaz Mustafa, CEO of Ismail Iqbal Securities, noted that falling oil prices and reduced uncertainty had encouraged investors to re-enter the market.

Similarly, analysts at Topline Securities said the ceasefire triggered widespread optimism, with investors quickly pricing in reduced geopolitical risks. The decline in international oil prices also eased concerns about inflation and external account pressures.

The rally reflected renewed confidence, as both local and global markets responded positively to diplomatic progress and expectations of economic stabilisation.