KARACHI: Stocks at the Pakistan Stock Exchange rallied on Friday, with the benchmark KSE-100 Index posting strong gains amid optimism over a potential easing of tensions in the Middle East.
The KSE-100 Index climbed to an intraday high of 173,472.85, up 3,560.99 points, or 2.1 per cent, compared to the previous close of 169,911.95. During the session, the index also touched a low of 170,758.25, still reflecting a gain of 846.30 points.
Market participants attributed the rally to improving global sentiment, driven by expectations of a possible diplomatic breakthrough in the ongoing regional conflict.
Optimism drives buying
Analysts said investor appetite strengthened on hopes that negotiations between the United States and Iran could lead to a deal in the coming days.
Ahfaz Mustafa, CEO of Ismail Iqbal Securities, said expectations of progress in diplomacy had triggered a “fear of missing out” among investors, prompting them to re-enter the market.
Sentiment was further buoyed after U.S. President Donald Trump expressed confidence that talks with Iran were progressing positively and could resume over the weekend.
However, uncertainty remains, as Iran has not publicly indicated any willingness to concede on key issues such as its enriched uranium stockpile.
Mixed signals from global developments
While diplomatic signals have improved, caution persists. U.S. Defence Secretary Pete Hegseth warned that Iran could face further military action, including a blockade, if it failed to cooperate.
Meanwhile, reports suggested that Gulf and European leaders believe a lasting agreement could take months, urging an extension of the current ceasefire and reopening of the Strait of Hormuz to stabilise global energy markets.
Markets also took comfort from a recently announced 10-day ceasefire between Israel and Lebanon, though its durability remains uncertain.
Domestic factors support market
On the domestic front, economic indicators also lent support. Data from the State Bank of Pakistan showed that Pakistan’s current account surplus rose to $1.07 billion in March, up from $231 million in February, supported by lower trade deficits and strong remittance inflows.
Despite the improvement, the surplus declined 16 per cent year-on-year, with cumulative figures for the first nine months of FY26 standing at $8 million, significantly lower than $1.67 billion recorded in the same period last year.
The market also reacted positively to recent financial inflows from Saudi Arabia, which have helped strengthen foreign exchange reserves ahead of a scheduled loan repayment to the United Arab Emirates.
In the previous session, the KSE-100 Index had already gained 1,392 points, closing at 169,911.95, indicating a continuation of bullish momentum in the market.