KARACHI: The Pakistan Stock Exchange saw a massive rally on Tuesday as investors cheered the news of a potential truce between Iran and Israel, temporarily easing concerns about escalating conflict in the Middle East.
The benchmark KSE-100 index jumped 5,759 points, marking a 4.96% gain by mid-afternoon, closing at 121,926.63 points. Earlier in the session, the index had surged nearly 5,878 points to hit an intraday high of 122,045.62 before trading was halted due to a built-in circuit breaker.
The surge came on the back of a late-night announcement by US President Donald Trump, claiming both Iran and Israel had agreed to a phased ceasefire to end nearly two weeks of hostilities. Investors responded positively, driving up prices across multiple sectors, said Yousuf M. Farooq, Director Research at Chase Securities.
However, optimism waned slightly after reports emerged during the day that Israel accused Iran of violating the ceasefire terms, trimming gains from the day’s peak.
Despite the pullback, analysts believe domestic fundamentals are still supportive of the market. “If the ceasefire holds, the rally has more room to go,” Farooq noted, adding that global equities and oil prices also reacted sharply to the truce news.
Meanwhile, oil prices retreated by 5% on easing fears of a disruption in Middle Eastern supplies, while the US dollar weakened in global markets.
Trading at the PSX was suspended for an hour after the KSE-30 index spiked by 5% within five minutes, triggering the bourse’s automatic cooling mechanism. The session resumed at 12:31pm.
The market had faced a heavy sell-off on Monday due to geopolitical jitters triggered by reports of US airstrikes on Iranian nuclear sites.
While Israel has said it achieved its military goals, Iranian officials have remained cautious, stating that no formal ceasefire deal has been finalized yet but hinting at de-escalation if Israeli attacks stop.
