ISLAMABAD: Pakistan Stock Exchange (PSX) on Wednesday witnessed a buying rally with the benchmark index gaining nearly 7,000 points, after US President Donald Trump announced a halt to a US military operation to escort ships through the Strait of Hormuz, just a day after the operation’s launch.
The move was seen as part of efforts to reach an agreement with Iran to end the ongoing Middle East conflict.
The market opened on a relatively stable note, with minor fluctuations in early trading as the index moved within a narrow range through the late morning.
However, sentiment turned decisively positive after midday.
From early afternoon, the index began a steady upward trajectory, reaching an intraday high of 172,088.58.
Despite a slight pullback near the peak, the market retained most of its gains and closed close to session highs.
At the close, the benchmark index settled at 171,704.75, marking a surge of 6,962.28 points, or 4.23 per cent.
“The sentiment has shifted from crisis mode to growth mode,” said Behtari Capital.
“Pakistan’s successful mediation has not only eased tensions in the Strait of Hormuz but has also set the stage for a significant structural rally at the PSX.”
In a key development, the United States indicated it was close to reaching an agreement with Iran on a one-page memorandum of understanding aimed at ending the conflict and establishing a framework for detailed nuclear negotiations, Axios reported, citing multiple sources.
A day earlier, the PSX had extended its gains, closing higher as early optimism driven by easing geopolitical tensions outweighed late-session volatility linked to uncertainty in global energy markets.
The benchmark KSE-100 Index rose by 793.53 points, or 0.48%, to close at 164,742.47 points.
Globally, markets reacted strongly to the developments. Stocks surged, oil prices declined, and the US dollar weakened in Asian trading after President Trump spoke of “great progress” towards a “final agreement” with Tehran.
The easing tensions pushed Brent crude down by 1.2% to $108.51 per barrel, while S&P 500 e-mini futures rose 0.3%.
Meanwhile, the MSCI Asia Pacific Index (excluding Japan) climbed 2.3% to a record high, led by a 5.1% surge in South Korea’s KOSPI, which crossed the 7,000 mark for the first time.
On Wall Street, equities also reached new highs, with the S&P 500 gaining 0.8% and the Nasdaq Composite advancing 1% on Tuesday.
