Pakistan Stock Exchange Soars Over 5,700 Points Following Ceasefire Announcement Between Iran and Israel
The Pakistan Stock Exchange (PSX) witnessed a significant rally on Tuesday, with the KSE-100 Index surging by 5,759.16 points, or 4.96%, by 2:20 PM to reach 121,926.63. The market’s rise followed reports of a proposed ceasefire between Iran and Israel, announced by former US President Donald Trump in a late-night social media post.
Market Rally and Temporary Halt
Earlier in the day, the benchmark index had climbed as much as 5,878 points, hitting an intraday high of 122,045.62 from the previous close of 116,167.47. The sharp surge triggered a market halt, in accordance with PSX regulations, as the KSE-30 Index rose over 5%.
Trading was paused at 11:26 AM and resumed after a one-hour cooling-off period at 12:31 PM.
Yousuf M. Farooq, Director of Research at Chase Securities, attributed the rally to the overnight ceasefire announcement. He stated,
However, sentiment cooled slightly after reports emerged suggesting Israeli officials claimed Iran had violated the terms of the truce, causing a minor pullback from the day’s high.
Background: Tensions and Global Impact
The PSX’s gains followed a sharp sell-off on Monday, driven by escalating tensions in the Middle East. Reports of US airstrikes on Iranian nuclear facilities and warnings from Tehran regarding the Strait of Hormuz had earlier unsettled global investors, leading to a drop of over 3,800 points in the KSE-100 Index.
Tuesday’s rebound coincided with a broader global market rally. According to Reuters, world stocks climbed while the US dollar declined, and oil prices fell by nearly 5% as fears of prolonged supply disruptions eased.
Ceasefire Developments
In his post, former President Trump outlined a staggered ceasefire, stating Iran would begin halting operations at 4:00 AM GMT (9:00 AM PKT) on Tuesday, with Israel following 12 hours later.
Iran’s Foreign Minister Abbas Araghchi responded on social media, clarifying there was no formal ceasefire agreement, but noted that Iran would halt its response if Israel ceased what he described as “illegal aggression.”
Meanwhile, Israeli officials claimed they had achieved their strategic goals, citing the neutralization of threats related to Tehran’s missile and nuclear capabilities. The government also expressed readiness to “respond forcefully” to any breach of the ceasefire.
Regulatory Mechanism Explained
Commenting on the market halt, Farooq explained that PSX regulations require a 60-minute trading suspension when the KSE-30 Index moves ±5% and holds that level for five consecutive minutes.
As geopolitical developments continue to influence investor sentiment, market watchers remain focused on the sustainability of the ceasefire and its impact on global and regional financial trends.
