KARACHI: On the eve of the long Eidul Azha break, the Pakistan Stock Exchange (PSX) attracted renewed buying interest on Monday amid growing optimism about a possible agreement between the US and Iran that would ease tensions and smooth the flow of commercial vessels, especially oil and LNG, via the Strait of Hormuz, propelling the benchmark to rally over 4,000 points intraday.

Topline Securities Ltd said the benchmark KSE-100 index settled at 171,725.29 points, posting a robust gain of 3,881.05 points, or 2.31 per cent, as investor sentiment staged a strong recovery. The market experienced considerable intraday volatility, with the index touching an intraday high of 171,920 points and a low of 170,161 points.

Investor confidence improved significantly following positive developments over the weekend in negotiations between Iran and the US, with reports indicating that discussions may reach a conclusion in the near term. Sentiment was further bolstered by a sharp decline in international oil prices, which fell by nearly $6 per barrel.

Index jumps 3,881 points ahead of long Eid break

The bullish momentum was driven primarily by heavyweight stocks, including Habib Bank Ltd, Fauji Fertiliser Company, United Bank Ltd, Engro Holdings, and Lucky Cement, which together contributed 1,315 points to the benchmark index and were key to sustaining the rally.

Market participation remained healthy, with total trading volume rising by 5.31pc to 506 million shares and traded value surging 37.08pc to Rs31.1bn. Bank of Punjab topped the volume chart with 27 million shares.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, PSX, witnessed a strong session as the market opened on a positive note, with investor sentiment strengthening amid ongoing easing of geopolitical tensions.

Broad-based buying was observed ahead of the long closure due to the Eidul Azha holidays, as expectations of a potential agreement to the Middle East conflict continued to fuel optimism.

On the diplomatic front, Pakistani and Chinese companies signed agreements and MoUs worth $7bn during the Prime Minister’s visit to China to enhance B2B cooperation with the Chinese business community.

Analysts said the ongoing peace negotiations would remain a key market driver, with improving diplomatic momentum and easing oil prices supporting investor sentiment. However, uncertainty over a final agreement may keep regional markets volatile in the near term.

Published in Dawn, May 26th, 2026