KARACHI: The Pakistan Stock Exchange (PSX) sustained its overnight recovery rally as optimism about lasting peace was rekindled following hints from US President Donald Trump about a second round of talks in Islamabad.

Pakistani leadership’s engagements with Iranian authorities and other regional powers further boosted investor confidence, leading to widespread value-buying. As a result, the benchmark KSE 100 index climbed above 170,500 intraday, supported by falling oil prices.

The ongoing Middle East conflict continues to fuel global inflation, particularly in countries dependent on energy supplies from the region, including Pakistan, which is facing pressures on its foreign exchange reserves due to higher import costs and debt retirement amid slowing exports.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said the PSX extended its rally, with the KSE-100 index gaining 2,885.09 points, or 1.74 per cent, to close at 168,519.94, reflecting sustained investor confidence.

Index surpasses pre-war level

Market sentiment remained buoyant, supported by Saudi Arabia’s commitment to an additional $3bn deposit to Pakistan and easing global oil prices, with West Texas Intermediate at $92 and Brent crude at $94 per barrel. The combined effect of improving diplomatic and economic developments signals a gradual shift in the macro narrative from crisis stabilisation towards growth recovery.

On the monetary front, State Bank of Pakistan conducted a T-Bill auction, with cut-off yields declining across short tenors — one month (49bps), three months (35bps), and six months (32bps) — while the 12-month tenor rose by 14bps. This reflects evolving market expectations, with views now ranging from ‘status quo’ to a potential ‘50-100bps rate cut” in the upcoming monetary policy on April 27.

While speculation about a potential second round of US-Iran talks in Islamabad continues to circulate, official confirmation remains pending. However, ongoing diplomatic engagement and indications of renewed negotiations suggest that market sentiment may remain supported, with near-term momentum likely to remain sensitive to further developments.

Topline Securities Ltd said the local bourse opened on a strong note, extending the previous session’s bullish momentum. However, mid-session volatility emerged, eroding some of the early gains. The market exhibited resilience and closed in the green. Notably, the index has now surpassed its pre-war level of 168,062, recorded on Feb 27, highlighting a robust recovery in market sentiment.

Index-heavy stocks, inc­lu­­ding United Bank, Fa­u­­ji Fertiliser, Hub Power, Meezan Bank, and Bank of Punjab, collectively contributed 1,251 points to the benchmark index.

Investor participation turned vibrant as the trading volume rose 46.24pc to 1.205 billion shares and the traded value surged 63.51pc to Rs59.4 billion.

Published in Dawn, April 16th, 2026