It was a historic day at Pakistan Exchange (PSX) on Wednesday, as investors rejoiced after the US and Iran agreed to a two-week ceasefire amid Pakistan’s mediation efforts.

The ceasefire also triggered a global relief rally, with oil prices plunging sharply and equities surging across the US, Europe, and Asia.

Bullish momentum was observed right from the opening bell, as the benchmark KSE-100 Index gained over 8%, triggering a market halt at 9:37 a.m.

 “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,” read the notice.

The market activity resumed at 10:42 a.m.

As the session progressed, the index maintained a sustained upward trajectory driven by aggressive buying, hitting an intraday high of 165,924.13.

The KSE-100 Index closed at 165,811, recording its highest-ever single-day gain of 14,138 points or 9.32%.

“Today was a short-seller’s nightmare and a buyer’s paradise,” said Behtari Capital on Wednesday.

“While the ceasefire is provisional, the combination of debt repayment success and lower oil prices has created a strong floor for the index,” it added.

Waqas Ghani, Head of Research at JS Global, told Business Recorder that Pakistan’s diplomatic efforts to ease United States-Iran tensions triggered a sharp sentiment reversal at the PSX, with a peace-driven rally highlighting both the rapid unwinding of risk premiums and the market’s underlying upside potential.

“Going forward, sustained de-escalation and/or a formal settlement could trigger a further correction in commodities and a broad-based recovery across financial markets,” said Arif Habib Limited (AHL) in a note.

The focus now turns to monetary policy, with the SBP closely monitoring developments on the geopolitical front and their implications for the economy, said the brokerage house.

 “While secondary market yields have already priced in a 100-150bps hike, sustained easing of geopolitical tensions and the absence of major external shocks could provide room for the SBP to adopt a more accommodative stance.

 “That said, risks remain: any breach of the two-week ceasefire or setbacks in achieving a broader resolution could swiftly trigger renewed volatility,” it added.