The Pakistan Stock Exchange (PSX) staged a strong recovery on Tuesday as the trading session reflected a classic battle between panic and confidence, with the market demonstrating remarkable resilience after Monday's sharp selloff. Despite persistent intraday volatility, the market managed to pare recent losses, with the benchmark KSE-100 Index gaining 421.57 points, or 0.25%, to settle at 171,021.77.

The index successfully absorbed early selling pressure to reverse momentum following Monday's selloff.  Rather than extending the previous day's downturn, value hunters viewed the lower entry points as a prime buying opportunity, triggering a wave of fresh accumulation across key industrial and financial sectors.

Buying momentum remained particularly strong throughout the morning session, keeping the index firmly in positive territory as steady accumulation continued well into the second half of the trading day.

According to Ismail Iqbal Securities, the benchmark index managed to close slightly positive but remained characteristically volatile throughout the session, primarily because market participants chose to maintain a cautious stance ahead of the highly anticipated federal budget announcement.

KTrade Securities Ahmed Sheraz observed that the KSE-100 index extended its recovery and closed at 171,021 points, gaining 421 points (+0.25% DoD) in what proved to be a relatively dull and mixed trading session.

Read: Bears take control at PSX as KSE-100 index loses over 3,000 points

Market participants largely remained cautious amid the lack of a strong domestic trigger and continued uncertainty surrounding developments in the ongoing United States-Iran negotiations, where conflicting reports regarding progress and potential roadblocks kept investors on the sidelines.

Sector-wise, performance remained mixed, with selective strength emerging in banking, fertiliser, oil & gas, and cement stocks. Index gains were primarily driven by Meezan Bank, Fauji Fertiliser, United Bank, Pakistan Petroleum, and Pakistan Telecommunication, which collectively provided support to the benchmark despite the absence of broad-based buying interest.

Moving forward, investor sentiment is likely to remain sensitive to developments surrounding the US-Iran negotiations and movements in international oil prices.

The persistent back-and-forth flow of headlines has created uncertainty across regional markets, limiting conviction among participants. In the near term, the market may continue to trade in a range-bound manner until greater clarity emerges on geopolitical developments and broader macroeconomic catalysts, Sheraz mentioned.

Cumulatively, trading volume dropped to 550.7million shares from Tuesday’s close of 589.7 million. The value of traded shares stood at Rs27.4 billion.

In ready market, shares of 488 companies were traded of which 221 stocks closed higher, 226 fell, and 41 remained unchanged.

WorldCall Telecom was the volume leader with trading in 43 million shares, gaining Rs0.01 to close at Rs1.29.