Investor sentiment soared on Tuesday as hopes for regional stability and easing oil costs sparked a rebound at the bourse, reversing the previous session’s sharp losses.

“The ceasefire and the subsequent plunge in oil prices have triggered the rally today,” said Ahfaz Mustafa, CEO of Ismail Iqbal Securities. “The falling oil prices and the ending of the threat of a prolonged conflict in the Middle East has calmed the markets. They are giving investors the confidence to re-enter the market.”

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index surged to an intraday high of 120,770.37, gaining 4,602.90 points, or 3.96%, and touched a low of 120,369.53, reflecting a rise of 4,202.06 points, or 3.61%.

US President Donald Trump announced late Monday that a ceasefire had been agreed between Iran and Israel. “It has been fully agreed by and between Israel and Iran that there will be a Complete and Total CEASEFIRE... for 12 hours, at which point the War will be considered, ENDED!” Trump wrote on Truth Social.

Earlier, Trump had urged Iran to seek peace with Israel, saying he did not expect further retaliation from Tehran after its missile strike on a US base in Qatar. “Congratulations world—it’s time for peace,” he said, adding that Iran had “gotten it all out of their ‘system’” and expressing hope for future “Peace and Harmony in the Region.”

The rally came after a steep plunge on Monday, when the KSE-100 Index dropped 3,855.77 points, or 3.21%, to close at 116,167.47. The day’s high and low were recorded at 118,798.52 and 115,887.49 points, respectively.