The Pakistan Stock Exchange (PSX) staged a strong recovery on Tuesday, with the benchmark KSE-100 Index surging 2,592.79 points, or 1.56%, to settle at 168,460.11, as broad-based buying gathered pace amid hopes of reduced domestic political tensions.

Investor sentiment improved after Prime Minister Shehbaz Sharif called on the Pakistan Tehreek-e-Insaf (PTI) to abandon its agitational politics and cancel its long march, saying protests would damage economic growth and Pakistan’s international standing. The call for dialogue, conditional on ending the agitation, provided some relief to investors concerned about renewed political uncertainty.

The Index traded between an intraday high of 168,626.18 and a low of 165,651.68, recovering strongly from the session’s early levels as buying emerged across key sectors.

Buying interest was witnessed in automobile assemblers, cement, commercial banks, oil and gas exploration companies, oil marketing companies, power generation and refineries.

Meanwhile, international oil prices also eased on Tuesday as resilient Middle Eastern crude exports and a G7 emergency stockpile release reduced immediate supply concerns, although security risks in the region continued to cap further declines.

“The decline in international oil prices, along with the government’s indication that it remains open to negotiations with the PTI to end the long march, has helped improve investor sentiment,” AKD Securities Director Research Mohammed Awais Ashraf told the The Express Tribune.  The easing of both external and domestic concerns has encouraged fresh buying across key sectors and supported the broader market recovery, he added.

Read: PSX below 170k on weak sentiment

After yesterday’s heavy sell-off and margin-driven liquidation, the market initially remained subdued and consolidated on thin volumes, but improving domestic and global cues triggered broad-based buying and a strong recovery, mentioned Ahmed Sheraz of KASB KTrade in its market wrap.

Buying was visible across commercial banks, Oil &Gas, cement, investment banks and power, with Engro Holdings, UBL, Hub Power, HBL, Oil & Gas Development Company, and Mari Energies closing the session in the green. 

Sentiment was further supported by easing oil prices, with Brent falling below $100 to around $98, amid improving Red Sea conditions, G7-backed strategic oil releases and price support from Saudi producers. Additionally, hopes of US-Iran dialogue also reduced geopolitical risk after President Trump indicated Washington was open to direct talks.

On the domestic front, the government’s outreach to the opposition for negotiations added another layer of clarity, helping the market regain confidence. Going forward, the recovery could extend if geopolitical tensions, oil prices and domestic political noise remain contained, although some consolidation after today’s sharp rebound would be healthy, Sheraz predicted. 

Trading volume, however, eased to 432 million shares from 441.8 million recorded on Monday, while the value of traded shares stood at Rs20.1 billion. Shares of 496 companies were traded in the ready market, with 314 closing higher, 147 lower and 35 unchanged.

Cnergyico PK remained the volume leader, with 55.1 million shares changing hands. The stock gained Rs0.72 to close at Rs12.93.