The Pakistan Stock Exchange (PSX) recorded a historic rally on Tuesday, with the KSE-100 index jumping 7,032.60 points, or 4.44%, marking the second-highest single-day gain in its history. The index closed at 165,476.02, capping off a session dominated by aggressive buying and a sharp reversal in sentiment.

This dramatic surge follows a day of heavy selling, underscoring how quickly investor sentiment has shifted. Investor confidence also surged on the back of easing geopolitical tensions, a calmer political environment, and a key development on the economic front following news that Finance Minister Muhammad Aurangzeb met with Jihad Azour, Director of the International Monetary Fund’s (IMF) Middle East and Central Asia Department, on the sidelines of the Annual Meetings of the IMF and World Bank in Washington, DC.

The meeting reaffirmed mutual commitment to Pakistan’s reform agenda and macroeconomic stability, reinforcing investor confidence in continued external backing and consistent policy direction.

Read: PSX nosedives over border clashes

Notably, three of the top single-day gains in the KSE-100 have occurred within the past six months, signalling sustained investor optimism and improving market dynamics.

The rebound was broad-based, with strong buying interest across major sectors, including oil & gas exploration, oil marketing companies (OMCs), power generation & distribution, refineries, commercial banks, cement, and automobile assemblers. These sectors, particularly those with high index weight, played a vital role in lifting the market, reflecting a unified bullish trend.

Market analysts attribute this momentum to hopes of political stability and the government’s continued adherence to the International Monetary Fund (IMF) programme, which is seen as critical to restoring macroeconomic stability.

With the index closing at an intra-day high of 165,866.78, the short-term outlook remains bullish, though sustainability will depend on upcoming political and economic developments.

Read More: Profit-taking ends five-week rally at PSX

In corporate news, Mari Energies (MARI) announced its FY25 financial results and future outlook. The company reported net sales of Rs177 billion in FY25, down 3% year-on-year, primarily due to lower production volumes resulting from curtailments on SNGPL’s transmission network, coupled with lower wellhead prices, according to AKD Securities, which attended the briefing.

Topline Securities wrote in its early note that the KSE-100 posted its second-highest single-day gain, adding 7,033 points to close at 165,476. The top three single-day gains have occurred within the last six months, reflecting sustained investor optimism and improving market confidence.

Shares of 483 companies were traded. Of these, 391 closed higher, 69 dropped, and 23 remained unchanged. The Bank of Punjab was the volume leader with trading in 100.8 million shares, rising Rs 2.85 to close at Rs 34.63.