Karachi (TDI): The Pakistan Stock Exchange (PSX) recorded a sharp rally on Tuesday after US President Donald Trump announced a ceasefire agreement between Israel and Iran, bringing temporary relief to regional tensions.
The KSE-100 index surged by 5,878 points during intraday trading, reaching 122,045.62—a 5.06% gain. The sharp movement triggered a temporary one-hour halt in trading under PSX regulations designed to manage extreme volatility.
Upon resumption, investor sentiment remained strong, and the index added another 516 points. By the end of the session, the KSE-100 index closed at 122,562.20 points, reflecting investor optimism over the reported de-escalation.
The rebound came just one day after the market had faced heavy losses. On Monday, the benchmark index dropped 3,855 points amid concerns about further escalation in the Middle East.
Regional instability and the potential for broader conflict had contributed to a cautious and bearish atmosphere across financial markets.
Read More: Pakistan Reaffirms Support for Iran Amid Escalation
President Trump’s announcement that both Israel and Iran had agreed to a “complete and total ceasefire” after analysts cited a 12-day conflict as the key factor driving the turnaround.
According to the U.S. statement, the ceasefire was to begin in a phased manner starting around 4 a.m. GMT on Tuesday. The development helped improve sentiment in several regional markets, including the PSX.
However, reports from Iranian officials introduced a level of uncertainty. A spokesperson from Tehran stated that Iran had not formally received a ceasefire proposal and would continue its response to any perceived acts of aggression.
Despite the conflicting messages, investors appeared to focus on the prospect of reduced tensions.
Read More: Israel Says Yes to Ceasefire, Iran Says No
In the global energy market, oil prices declined in response to the ceasefire news. Brent crude fell by 2.9% to $69.40 per barrel, while U.S. crude dropped by 3% to $66.48.
The price movements reflected a drop in concerns over supply disruptions from the oil-rich region, contributing further to the bullish sentiment in equity markets.
Market analysts noted that while Tuesday’s rally signaled investor relief, ongoing developments in the region would continue to influence market direction in the coming days.
Areeba Kanwal is a contributor at The Diplomatic Insight and has passion for International Relations and diplomacy.
