Pakistan's stock index records biggest single-day gain: What's the reason?
What's the story
Pakistan's benchmark stock index, the KSE-100, witnessed its biggest single-day rally in history today. The index surged over 12,000 points during intraday trading after news of a ceasefire between the United States and Iran improved investor sentiment. The KSE-100 jumped by an unprecedented 12,362.38 points or 8.15%, to reach 164,035.83 today.
Market pause
Trading on Pakistan Stock Exchange temporarily halted
Following the massive surge, trading on the Pakistan Stock Exchange was temporarily halted as per exchange regulations. The move comes after weeks of volatility on the exchange due to rising geopolitical tensions in West Asia. The rally is also the biggest single-day gain in absolute terms for the KSE-100 index, according to reports from local daily Dawn.
Ceasefire impact
US, Iran agree to 2-week ceasefire
The historic rally was triggered by the confirmation of a two-week ceasefire between the US and Iran. Under the terms of this agreement, Washington has agreed to suspend its military operations in exchange for Tehran reopening the Strait of Hormuz, a vital global oil shipping route. US President Donald Trump announced he would "suspend the bombing and attack of Iran for a period of two weeks," on condition that Iran ensures "complete, immediate, and safe" reopening of this strategic strait.
Iranian assurance
Iran agrees to allow safe passage through Strait of Hormuz
Iran's Foreign Minister Abbas Araghchi confirmed that Tehran would permit safe passage through the Strait of Hormuz for two weeks. This confirmation from Iran's side further fueled the stock market rally in Pakistan. The ceasefire is expected to pave the way for new negotiations between the US and Iran, with talks likely to be held in Islamabad.