April 8, 2026

PSX rallies over 9% as Pakistan-brokered ceasefire boosts sentiment

Market halt was triggered after the benchmark index jumped 8.15% in the early minutes of trade

April 8, 2026

PSX rallies over 9% as Pakistan-brokered ceasefire boosts sentiment

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The Pakistan Stock Exchange (PSX) staged a sharp rally on Wednesday, gaining over 14,000 points or more than 9%, as easing geopolitical tensions, driven by a Pakistan-brokered two-week ceasefire between the United States and Iran and Tehran’s move to reopen the Strait of Hormuz, triggered a surge in investor confidence.

According to the PSX website, the benchmark index skyrocketed to 164,035.83 in the early minutes of trade, gaining 12362.38 points, or 8.15% from the previous session. This rally triggered a market halt at 09:37 am.

“All TRE Certificate Holders are hereby informed that due to a 5% increase in the KSE-30 index from the previous trading day’s close of the same, a market halt has been triggered as per PSX Regulations, and all equity-based markets have been suspended accordingly,” the PSX said in a notice.

Trading resumed at 10:42 am, with momentum remaining strong, and the benchmark index touching the 165,575.07 mark, its highest level.

Broad-based buying was recorded across major sectors, including automobile assemblers, oil and gas exploration and marketing companies, automobile parts and accessories, cable and electrical goods, cement, mutual funds, commercial banks, fertiliser, pharmaceuticals, power generation and distribution, and refineries.

At close, the KSE-100 settled at 165,811.00, up by 14137.55 points, or 9.32% from the previous close.

In a major breakthrough in regional de-escalation, Pakistan’s Prime Minister Shehbaz Sharif requested that US President Donald Trump make a two-week extension to a deadline he imposed on Iran to end its blockade of Gulf oil.

“To allow diplomacy to run its course, I earnestly request President Trump to extend the deadline for two weeks. Pakistan, in all sincerity, requests the Iranian brothers to open the Strait of Hormuz for a corresponding period of two weeks as a goodwill gesture,” Sharif said in a post on X.

“Based on conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir, of Pakistan, and wherein they requested that I hold off the destructive force being sent tonight to Iran, and subject to the Islamic Republic of Iran agreeing to the complete, immediate, and safe opening of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks,” Trump said in Truth Social post in response to Pakistan’s premier’s tweet.

Meanwhile, Iran’s Foreign Minister Abbas Araghchi confirmed the temporary reopening of the route. “For a period of two weeks, safe passage through the Strait of Hormuz will be possible via coordination with Iran’s Armed Forces and with due consideration of technical limitations,” Araghchi said in a statement posted on X.

Arif Habib Limited said that a Pakistan-facilitated two-week ceasefire triggered a sharp relief rally, with PSX hitting an 8.7% halt-up as investors rushed back after a ~10% war-led correction.

"The unwind in geopolitical risk pushed global equities higher and oil sharply lower, supporting Pakistan’s macro outlook. If diplomacy holds, the easing risk premium could drive further recovery in financial markets, though any breach of the ceasefire remains a key downside risk," the brokerage firm said in a note.

Today’s rally follows a volatile session on Tuesday, when the KSE-100 Index closed at 151,673.45, up 465.64 points, or 0.31%, after recovering from early losses amid geopolitical uncertainty and pressure on foreign exchange reserves.

Arif Habib Limited further noted that a continued de-escalation could lead to further recovery in financial markets, though risks remain if the ceasefire fails or broader negotiations stall.

"Attention is now shifting to monetary policy, with the State Bank of Pakistan monitoring developments. While markets have already priced in a potential interest rate increase of 100–150 basis points, easing external pressures may provide room for policy adjustments if stability persists," it said, adding that market direction in the coming days is expected to depend on whether the ceasefire leads to a longer-term resolution.

Globally, fuel prices dropped, stocks surged and the dollar was knocked back on Wednesday as a two-week Middle East ceasefire sparked a relief rally, fuelled by ‌ hopes that oil and gas flows through the Strait of Hormuz could resume.

The news capped weeks of financial market volatility and geopolitical upheaval after U.S. and Israeli strikes on Iran late February pushed tensions to the brink, with Tehran effectively choking off the strategic waterway that carries about 20% of the world’s oil and gas.

Market reaction was ⁠swift and dramatic, with U.S. crude futures down around 16% to $94.59 a barrel, while Brent futures also slid 15% to $92.35 per barrel.

S&P 500 futures leapt over 2%, while European futures jumped over 4%. The U.S. dollar fell broadly, having been the haven of choice during the tumult.

In Asia, Japan’s Nikkei surged about 5% while South Korea’s Kospi rose 6%, triggering a halt in trading. That left the MSCI’s broadest index of Asia-Pacific shares outside Japan up 4%.

Beyond the immediate relief, investors remain keen to see whether the ceasefire leads to a broader resolution before placing major bets.