The Pakistan Stock Exchange (PSX) staged a strong recovery as the benchmark KSE-100 index surged by more than 4,000 points, driven by renewed optimism over the possible resumption of talks between the United States and Iran. Investor sentiment improved significantly after signals emerged that diplomatic efforts could restart following the recent collapse of negotiations in Islamabad.

The rally comes after a period of extreme volatility, during which the market had suffered heavy losses due to escalating geopolitical tensions and uncertainty surrounding the conflict. Fresh hopes of dialogue between Washington and Tehran helped restore confidence, prompting aggressive buying across key sectors.

Analysts noted that investors are closely tracking geopolitical developments, as any progress in diplomacy could stabilise global oil markets and reduce economic uncertainty. Broad-based gains supported the positive momentum, with major stocks contributing to the index’s sharp upward movement.

However, experts cautioned that the market may remain volatile, as sentiment continues to depend heavily on developments in US-Iran relations.

The surge highlights the sensitivity of Pakistan’s stock market to global events, particularly those impacting energy prices and regional stability, as investors react quickly to shifts in geopolitical outlook.