Investor optimism held firm on Wednesday as the stock market extended its upward trajectory, buoyed by easing geopolitical tensions, macroeconomic stability, and renewed prospects of foreign funding.

“Stocks showed recovery as investors weigh Israel-Iran ceasefire talks," said Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities.

"Surging global equities, deliberations over privatisation of SOEs, strong rupee and government resolve over circular debt management plan played a catalyst role in bullish activity at PSX,” he added.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index closed at 122,761.64, up 515.01 points, or 0.42%, from the previous close of 122,246.63.

During the session, the index climbed to an intraday high of 123,256.55, gaining 1,009.92 points, or 0.83%, and touched a low of 122,168.76, reflecting a marginal fall of 77.87 points, or -0.06%.

Investor confidence also drew support from a fresh $350 million financing agreement between Pakistan and the Asian Development Bank (ADB), aimed at boosting women’s financial inclusion and entrepreneurship.

Signed by Additional Secretary of the Economic Affairs Division Sabina Qureshi and ADB’s Dinesh Raj Shiwakoti, the package includes a $300 million policy-based loan and a $50 million Financial Intermediary Loan (FIL) signed by the State Bank of Pakistan.

Consumer sentiment has also improved notably. The latest edition of the Pakistan Consumer Confidence Index (CCI) — a joint initiative by Dun & Bradstreet and Gallup Pakistan — showed a 9.2% quarter-on-quarter increase and a 24.6% year-on-year improvement.

The index rose to 96.2 points from the previous quarter’s 88.1, reflecting growing optimism in household financial outlooks and expectations for economic recovery.

Meanwhile, global oil markets cooled off significantly, easing inflationary concerns. Brent crude fell 5.2% to $67.75 per barrel, while WTI dropped 5.4% to $65.01 after Israel accepted US President Donald Trump’s ceasefire proposal with Iran, bringing a temporary halt to the 12-day conflict.

On Tuesday, the KSE-100 Index had surged by 6,079.17 points, or 5.23%, to close at 122,246.64. It had touched a high of 122,725.21 and a low of 120,369.54 during the session, marking the second-largest single-day point gain in the index’s history.