The Pakistan Stock Exchange (PSX) closed higher on Friday as improving expectations of a possible diplomatic breakthrough in the Middle East boosted investor confidence. Market sentiment strengthened on hopes that ongoing tensions in the region could ease through negotiations.
The benchmark KSE-100 Index showed strong upward movement during the session. It touched an intraday high of 173,444.89 points, gaining 3,532.94 points or 2.08%, while the lowest level recorded was 170,758.25 points, still up 846.30 points or 0.50% compared to the previous close of 169,911.95.
Market experts said investors rushed back into the market amid growing optimism. According to Ismail Iqbal Securities CEO Ahfaz Mustafa, the expectation of a possible deal in the Middle East has created a sense of urgency among investors. He noted that many are entering positions early, anticipating positive developments in the coming days.
Global sentiment also improved after remarks from US President Donald Trump, who suggested that progress was being made toward a potential agreement with Iran. He indicated that discussions could resume soon and hinted at broader diplomatic outcomes, including possible reopening of key maritime routes. However, no official confirmation has come from Iran regarding any major concessions.
At the same time, US Defence Secretary Pete Hegseth issued a more cautious warning, stating that Iran could face strong military consequences if it rejects diplomatic efforts. This contrast between diplomatic optimism and military warnings kept global markets alert.
Reports from international media also suggested that some Gulf and European leaders are pushing for a longer ceasefire, as concerns remain over global economic stability. Markets also found some relief from a recent 10-day ceasefire between Israel and Lebanon, although analysts say the situation remains uncertain.
On the domestic front, Pakistan’s external account showed improvement as the current account recorded a surplus of $1.07 billion in March, up from $231 million in February. The increase was supported by lower import bills and strong remittance inflows, according to State Bank of Pakistan data.
However, on a yearly basis, the surplus showed a decline compared to the same period last year. Despite this, recent financial inflows from Saudi Arabia helped strengthen Pakistan’s foreign exchange reserves ahead of upcoming external repayments.
In the previous trading session, the PSX also performed strongly, rising by 1,392.01 points to close at 169,911.95, continuing the bullish trend driven by global and domestic economic developments.
