The two-week ceasefire agreement between the United States and Iran has sent the equity markets in Pakistan on an unprecedented rally. The benchmark KSE 100 on Wednesday surged over 9 percent during the trading session. The index was up almost 13,800 points to about 165,471 points from the previous close of 151,673 points

Pakistan Stock Market Posts Biggest Absolute Gains After Ceasefire Agreement

The two-week ceasefire agreement between the United States and Iran has sent the equity markets in Pakistan on an unprecedented rally.

The benchmark KSE 100 on Wednesday surged over 9 percent during the trading session. The index was up almost 13,800 points to about 165,471 points from the previous close of 151,673 points.

Trading had to be suspended after the sharp upward move.

In absolute terms, this is the biggest climb in the country’s equity index. Earlier in the day, the index opened over 8.3 percent higher at 164,308 points.

Apart from the hopes of easing the energy crisis in the country, the indices rallied because Pakistan played a key role in bringing the warring sides to the negotiation table.

“Based on conversations with Prime Minister Shehbaz Sharif and Field Marshal Asim Munir of Pakistan, and wherein they requested that I hold off the destructive force being sent tonight to Iran, and subject to the Islamic Republic of Iran agreeing to the complete, immediate, and safe opening of the Strait of Hormuz, I agree to suspend the bombing and attack of Iran for a period of two weeks,” US President Donald Trump said, announcing the ceasefire on Wednesday.

Iran also acknowledged the role of Pakistan, with the former releasing a statement saying, “On behalf of the Islamic Republic of Iran, I express gratitude and appreciation for my dear brothers HE Prime Minister of Pakistan Sharif and HE Field Marshal Munir for their tireless efforts to end the war in the region. If attacks against Iran are halted, our powerful armed forces will cease their defensive operations.”

Earlier to this, Pakistan PM Sharif had urged both sides to restrain and follow a diplomatic route to resolve the conflict.

Investors in Pakistan may be expecting some benefits in the future from the US, the world’s biggest economy, after helping avert a global crisis.

During his second term, Trump has repeatedly shown his closeness to Pakistan’s ruling establishment, including its army chief Asim Munir.

The latest development may bring India’s rival into the good books of the US, benefiting the latter in terms of trade and investments.