The PSX rally lifted the benchmark KSE-100 index by 6,962.28 points, or 4.23%, to 171,704.75 on Wednesday as easing Middle East tensions and lower oil prices improved investor sentiment.
The index had closed previously at 164,742.47 points, according to market data. During the session, the KSE-100 traded between an intraday high of 172,088.58 and a low of 167,354.44.
Market sentiment improved after US President Donald Trump said on social media that he would pause “Project Freedom,” an operation linked to escorting ships through the Strait of Hormuz.
Reuters reported that oil prices fell for a second day after Trump indicated a possible peace deal could be reached to end the war with Iran.
Brent crude futures for July fell $1.52, or 1.38%, to $108.35 a barrel as of 0103 GMT, after dropping 4% in the previous session.
US West Texas Intermediate crude for June declined $1.50, or 1.47%, to $100.77 a barrel after closing 3.9% lower a day earlier.
Investors were also reacting to expectations that lower oil prices could ease inflation pressure.
Reuters, citing a source, reported that the United States and Iran were nearing agreement on a one-page memorandum to end the Gulf war.
Axios reported that the proposed 14-point memorandum was being negotiated by US envoys Steve Witkoff and Jared Kushner with Iranian officials, both directly and through mediators.
The memorandum would start a 30-day negotiation period on opening the Strait of Hormuz, limiting Iran’s nuclear programme and lifting US sanctions, according to the report.
