Pakistan stocks rallied on Monday, with the benchmark KSE-100 Index gaining more than 2,100 points as easing geopolitical tensions, lower inflation and falling global oil prices boosted investor confidence.

The benchmark index remained in positive territory throughout the session, hitting an intraday high of 178,985.94 before closing at 178,200.02, up 2,105.91 points, or 1.20%, from the previous close.

The rally was driven by optimism over the possibility of renewed diplomatic engagement between the United States and Iran after US President Donald Trump held off on a fresh attack on Iran.  

The easing tensions pushed international oil prices lower, encouraging broad-based buying across key sectors.

Trading opened on a strong note, with the benchmark quickly reaching its intraday peak.

Early gains, however, prompted profit-taking, causing the index to retreat and trade in the 178,200-178,500 range through the late morning.

Selling pressure intensified after midday, dragging the index to an intraday low of 177,759.88, before late-session buying erased most of the losses and lifted the market to a strong finish.

Topline Securities said in its market report that investor sentiment was also supported by the inflation data released on Monday.

Pakistan’s headline consumer price inflation eased to 9.2% in July 2026 from 11.07% in June, although it remained above 4.06% recorded in July last year.

Among index heavyweights, FFC, MCB Bank (MEBL), Lucky Cement (LUCK), Pakistan Petroleum Limited (PPL) and Engro Holdings (ENGROH) led the advance, contributing a combined 699 points to the benchmark index.

Market participation also improved, with total traded volume rising to 785 million shares, while the value of traded shares reached Rs33 billion. TSBL topped the volume chart with nearly 113 million shares changing hands.

The gains extended last week’s recovery, when the KSE-100 snapped a three-week losing streak as easing tensions between the United States and Iran improved market sentiment.

A sharp decline in international Brent crude prices during the week further strengthened risk appetite, helping the benchmark recover more than 5,000 points.

According to the Pakistan Stock Exchange’s weekly market review, the KSE-100 Index gained 5,072.93 points, or nearly 3%, to close last week at 176,094.13.