The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index gained almost 2,900 points on Wednesday, sustaining its bullish momentum for a second consecutive day.

The positive trend came amid hopes that peace talks between the United States and Iran will proceed to a second round, with US President Donald Trump saying they are more likely to be held in Islamabad.

The KSE-100 index surged by 2,885.10 points, or 1.74 per cent, to close at 168,519.94 points, up from the previous close of 165,634.84.

Opening on a positive note, the market reached an intraday high of 170,640.26 points at around 9:45am. It then fluctuated to drop to an intraday low of 168,182.98 points at 3:11pm, before regaining some ground to stand at 168,519.94.

Topline Securities Ltd noted that the benchmark index surged to an “impressive intraday high of 5,005 points”.

“However, mid-session volatility emerged, eroding a portion of the early gains and pulling the index down to an intraday low of 2,548 points — while notably remaining in positive territory throughout the session,” it added.

Despite intermittent fluctuations, the market exhibited resilience,” the firm said, adding that KSE-100 “has now surpassed its pre-war level of 168,062 recorded on February 27, 2026, highlighting a robust recovery in market sentiment”.

Index-heavy stocks, including United Bank Limited (UBL), Fauji Fertiliser Company Limited (FFC), The Hub Power Company Limited (HUBC), Meezan Bank Limited (MEBL), and The Bank of Punjab (BOP), posted notable gains, collectively contributing 1,251 points to the benchmark index, Topline noted.

“Investor participation remained subdued, with total traded volume recorded at 1,205 million shares, while market turnover stood at Rs. 59.4 billion. [K-Electic Limited] led the volume chart, with 124m shares traded.”

The PSX staged a spectacular recovery on Tuesday, gaining 5,000 points, thanks to renewed hopes for the resumption of US-Iran negotiations, which eased fears of oil supply disruptions and brought down oil prices.

US stocks rose and oil fell again on Wednesday after Trump’s remarks, fuelling hopes for a deal that would reopen the Strait of Hormuz and allow crude to flow again.

Ongoing diplomatic efforts and indications of possible follow-up negotiations are likely to keep sentiment supported and momentum elevated in the near term.

On the diplomatic front, Saudi Arabia pledged financial support of an additional $3bn to Pakistan and extended its existing $5bn facility for a further three years, providing a timely boost to sentiment.