KARACHI:

The Pakistan Stock Exchange (PSX) opened on a distinctly bullish note as a renewed whisper of global calm set the tone for trading on Tuesday. The benchmark KSE-100 Index surged sharply in early hours, reflecting a wave of optimism among investors. At 9:39am, the index was hovering around 164,322.07, with gains of 3,730.74 points or 2.32%. It was then trading at 164,782.58, advancing with 4,191.25 points, or 2.61% at 12:34pm.

The rally follows growing expectations of a possible resumption of diplomatic talks between the United States and Iran, reviving hopes of de-escalation in a conflict that has shaken global financial markets. 

The shift in sentiment comes in stark contrast to the previous session, where the market endured heavy losses amid failed negotiations and a spike in oil prices, triggering widespread panic selling across sectors.

Today, however, investors appear to be pricing in a different narrative – one where diplomacy may yet prevail. The prospect of renewed dialogue has eased concerns over supply disruptions and runaway energy prices, both critical variables for Pakistan’s import-heavy economy.

Read: PSX plunges over 6,600 points as US-Iran talks end without deal

Early gains were broad-based, led by index-heavy sectors such as automobile assemblers, cement, commercial banks, fertiliser, oil and gas exploration companies, OMCs, power generation and refinery, as participants moved to rebuild positions after the recent sell-off. 

The sharp rebound underscores the market’s sensitivity to geopolitical signals, where even tentative progress towards peace can ignite strong bullish momentum.

Despite the upbeat start, analysts caution that volatility may persist, with much depending on whether diplomatic efforts translate into concrete outcomes. “Investors are optimistic about the likely resumption of talks between the US and Iran,” AKD Securities Director Research Mohammed Awais Ashraf told The Express Tribune.

Timely affirmation from Saudi Arabia and Qatar to bridge the gap in external financing to be created by the payment of UAE $3.5 billion this month and higher imports due to elevated oil prices have also helped to uplift the sentiment, he added. This is also likely to help in the timely approval of a $1.2 billion disbursement from the International Monetary Fund (IMF) after the approval of its executive board, Ashraf predicted.