ISLAMABAD: The Pakistan Stock Exchange (PSX) on Tuesday witnessed a strong recovery amid a reported ceasefire between Israel and Iran, traders and analysts said.

On Monday, United States (US) President Donald Trump said on social media that Israel and Iran had agreed to a “complete and total ceasefire” to be phased in over 24 hours.

The benchmark KSE-100 index surged by 6,079 points, or 5.23 percent, to close at 122,246 points on Tuesday afternoon, compared to the previous day’s close of 116,167 points.

“Stocks closed near all-time high after Iran, Israel agreed to a ceasefire receding fears of escalation in the Middle East tensions,” Ahsan Mehanti of Arif Habib Corporation told Arab News.

“Upbeat economic data on cement sales for Jul-May’25, bull run in global equities and receding fears over high inflation, impact on exports for supply disruptions over Middle East conflict played a catalyst role in the record bullish close.”

Raza Jafri, head of research at Intermarket Securities Ltd., attributed the momentum to reduction in international oil prices along with settling regional tensions.

In volatile trading on Tuesday, crude futures slumped more than five percent after Trump’s declaration of the Iran-Israel ceasefire.

“With valuations still shy of a long-term mean and Pakistan having recently unveiled a market-friendly budget, bullish momentum is expected to continue,” Jafri added.

On Monday, Pakistan’s stocks and currency markets had tumbled as investors reacted to the US foray into the Israel-Iran conflict a day earlier.

Monday’s 3.2 percent fall to 116,167 points was the worst since May 8, when the index had plunged 5.9 percent day-on-day during the India-Pakistan military standoff.