The Pakistan Stock Exchange (PSX) witnessed a robust rebound on Tuesday, with the benchmark KSE-100 index surging by 4,332 points to reach 120,499 before midday. The market rally was fueled by renewed investor optimism following the announcement of a ceasefire between Iran and Israel, ending two weeks of heightened regional conflict.

This significant recovery comes after Monday’s close at 116,167, capping off a week of losses driven by fears surrounding escalating tensions in the Middle East, particularly after US-led airstrikes on Iranian nuclear facilities.

Market sentiment turned decisively positive as geopolitical concerns eased. Analysts note that the ceasefire has not only stabilized investor nerves but also opened the door for a broad-based rally across key sectors such as banking, energy, and cement.

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“This rebound reflects a collective sigh of relief from market participants,” said one analyst. “The earlier uncertainty from regional hostilities had sidelined many investors, but now there’s visible momentum returning to the market.”

Traders reported higher trading volumes and strong buying interest from both institutional and retail participants. Many are hopeful that the current stability will persist if the ceasefire holds and diplomatic channels continue to function.

The PSX rally is also in line with upward trends seen across regional markets, which had been rattled by the prospect of prolonged instability in the Gulf.