Bullish momentum swept the Pakistan Stock Exchange (PSX) on Wednesday after the United States and Iran agreed to a two-week ceasefire, supported by Pakistan’s mediation efforts, sending the benchmark KSE-100 Index sharply higher.
By 12:49pm, the index was trading at 165,247.13, up 13,573.68 points or 8.95%.
The market opened strongly, surging to 164,035.83 within minutes—an increase of 12,362.38 points or 8.15%—which triggered a temporary trading halt at 9:37am.
“All TRE Certificate Holders are hereby informed that due to a 5% increase in the KSE-30 index from the previous trading day’s close of the same, a market halt has been triggered as per PSX Regulations, and all equity-based markets have been suspended accordingly,” read the notice.
Trading resumed at 10:42am.
Broad-based buying was seen across major sectors, including cement, commercial banks, oil and gas exploration, oil marketing companies, and power generation. Heavyweight stocks such as ARL, HUBCO, MARI, OGDC, PPL, POL, MCB, HBL, and UBL posted gains.
“Today was a short-seller’s nightmare and a buyer’s paradise,” said Behtari Capital.
“While the ceasefire is provisional, the combination of debt repayment success and lower oil prices has created a strong floor for the index,” it added.
Waqas Ghani, Head of Research at JS Global, noted that Pakistan’s diplomatic role in easing US-Iran tensions led to a sharp improvement in investor sentiment, highlighting both the rapid unwinding of risk premiums and the market’s upside potential.
“Going forward, sustained de-escalation and/or a formal settlement could trigger a further correction in commodities and a broad based recovery across financial markets,” said Arif Habib Limited in a note.
Attention is now shifting to monetary policy, with the State Bank of Pakistan closely watching geopolitical developments and their economic impact.
“While secondary market yields have already priced in a 100-150bps hike, sustained easing of geopolitical tensions and the absence of major external shocks could provide room for the SBP to adopt a more accommodative stance.
“That said, risks remain: any breach of the two-week ceasefire or setbacks in achieving a broader resolution could swiftly trigger renewed volatility,” the note added.
US President Donald Trump, following discussions with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, announced the ceasefire on Tuesday, just hours before his deadline for Iran to reopen the Strait of Hormuz or face widespread attacks.
“This will be a double-sided CEASEFIRE!” Trump wrote on his Truth Social platform. “The reason for doing so is that we have already met and exceeded all Military objectives, and are very far along with a definitive Agreement concerning Longterm PEACE with Iran, and PEACE in the Middle East.”
Prime Minister Shehbaz Sharif welcomed the development and invited US and Iranian delegations to Islamabad on April 10, 2026, for further negotiations aimed at reaching a lasting agreement.
In the previous session, the KSE-100 Index closed at 151,673.46, gaining 465.64 points or 0.31% after a volatile day supported by late buying on ceasefire optimism.
Globally, markets also rallied as oil prices dropped sharply and risk appetite improved following the ceasefire, with hopes rising that oil and gas flows through the Strait of Hormuz would resume.
