The Pakistan Stock Exchange (PSX) posted a sharp rally on Tuesday, with the benchmark KSE-100 Index soaring 5470.16 points, or 4.71%% to 121,637.63 points during intra-day trading, reflecting heightened investor optimism following US President Donald Trump's announcement of the ceasefire between Iran and Israel.

The current index gained 6,479.11 points over the previous close of 116,167.47, marking one of the largest single-day gains in recent trading.

Source: PSX

The market reached an intraday high of 122,725.21 and a low of 120,369.53.

Trading volume stood at 236.9 million shares, with a total value of Rs20.6 billion, indicating strong buying interest across sectors.

The upward movement reflects renewed investor confidence amid easing geopolitical tensions and hopes of regional stability.

Waqas Ghani Kukaswadia, Head of Research at JS Global remarked that widespread buying activity was witnessed across all sectors, driving a strong rally. Trading was halted for an hour due to the sharp upward movement. The market is up by 5.65%, he added. 

Read: Stocks slump in panic selling

Earlier on Monday, PSX saw a steep sell-off, driven by escalating geopolitical tensions following the US attack on Iran.

The benchmark KSE-100 Index plunged by 3,856 points (3.21%) to close at 116,167, after hitting an intra-day low of 115,887. This marks one of the sharpest single-day losses in recent months.

According to Ahsan Mehanti of Arif Habib Corp, stocks slumped amid a sell-off in global equities due to the escalation in Middle East tensions.

Supply disruptions driven by expected retaliation to the US attack on Iran contributed to a weak export outlook and high inflation worries, which played a major role in selling activity at the PSX, he said.

Investor sentiment was dampened by rising geopolitical tensions, especially the intensifying conflict between Israel and Iran, which led to heightened uncertainty and widespread risk aversion. The nervousness triggered broad-based panic selling, observed Topline in a market review.

Topline added that major index-heavy stocks, including Engro Holdings, Pakistan Petroleum, Lucky Cement, OGDC and Mari Petroleum, were among the top laggards, dragging the index down by 1,054 points.

In its commentary, Arif Habib Limited (AHL) stated that the week started with strong selling following the escalation in the Middle East over the weekend.

Only five shares rose while 93 fell, with Engro Holdings (-5.02%), Pakistan Petroleum (-6.3%) and Lucky Cement (-4.02%) being the biggest drags.

JS Global analyst Mubashir Anis Naviwala remarked that the PSX suffered heavy losses amid a sharp sell-off, opening with a steep 2,000-point gap down amid panic selling.

The index failed to recover throughout the session, touching the low of 115,887 and eventually closing with a massive loss of 3,856 points at 116,167.

Total traded volume stood at 595 million shares, with top activity in WorldCall Telecom, Sui Southern Gas Company, Pervez Ahmed Consultancy, K-Electric and Kohinoor Spinning Mills, he noted.

The sharp decline reflected heightened fears driven by uncertainty and external pressures. "We advise investors to remain cautious, focusing on risk management and selective accumulation," the analyst added.

Overall trading volumes increased to 595 million shares compared with Friday's tally of 421.6 million. The value of shares traded was Rs23.5 billion. Shares of 468 companies were traded.

Of these, 56 stocks closed higher, 386 fell and 26 remained unchanged.

WorldCall Telecom was the volume leader with trading in 53.3 million shares, falling Rs0.10 to close at Rs1.35.

It was followed by Sui Southern Gas Company with 36 million shares, losing Rs4.2 to close at Rs38.8 and Pervez Ahmed Consultancy with 24 million shares, dropping Rs0.12 to close at Rs2.72.

Foreign investors bought shares worth Rs162 million, the National Clearing Company reported.