KARACHI: The Pakistan Stock Exchange (PSX) staged a historic rally on Tuesday after US President Donald Trump announced a ceasefire agreement between Israel and Iran early in the day, easing fears of a broader Middle East conflict and sparking a global risk-on sentiment.

The benchmark KSE100 index surged past the 122,000 barrier, posting its second-largest singleday gain in history.

Investor optimism soared as regional tensions deescalated, driving the index up by 6,079 points, or 5.23%, to close at 122,246. The session`s intraday high touched 122,725 points a gain of 6,557 points from the previous close.

The broader market exuberance was also reflected in the KSE-30 index, which hit its upper circuit breaker an exceptionally rare occurrence that underscoredthe intensity of the rally.

According to Topline Securities Ltd, the local bourse opened with a sharp 4,202-point jump as news of the ceasefire filtered into markets. Acrossthe-board buying was observed, driven by easing concerns over regional supply chain disruptions, an improved inflation outlook, and upbeat macroeconomic indicators.

Ahsan Mehanti of Arif Habib Corporation attributed the rally to multiplefactors, including a 21.6pc year-on-year rise in cement exports for JulyMay, bullish trends in global equities, and receding inflationary pressures.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, described the day`s performance as `peace igniting the rally,` highlighting the index`s reclaiming of the psychological 120,000 level. He said, `PSX posted its historic second-highest single-day gain, fuelled byimproved investor sentiment following the breakthrough ceasefire.

The key contributors to the index`s rise included Lucky Cement, Engro Corporation, United Bank Ltd, Pakistan Petroleum Ltd, Oil and Gas Development Company,MariPetroleum, Meezan Bank, Fauji Fertiliser, Systems Ltd and Pakistan State Oil. Together, these scrips added 2,872 points to the index.

Market participation also saw a sharp uptick.Total traded volume rose by 35.25pc to 804.8 million shares, while traded value surged by 60.13pc to Rs37.61bn. WorldCall Telecom Ltd led the volume chart with 65 million shares changing hands.

On the economic front, Pakistan plans to secure $3.3bn in syndicated and refinanced commercial loans from Chinese banks, a move expected to push the State Bank`s foreign exchange reserves above $14bn in FY25.With the 120,000 milestone breached, analysts believe the market`s next target could be the 130,000 level by the end of the month, contingent on sustained geopolitical stability and continued foreign inflows.

Meanwhile, global markets also responded positively to the ceasefire.

Oil tumbles Spc According to Reuters, Wall Street opened higher, with the S&P 500 and Nasdaq hitting record intraday highs, while European shares rallied on easing geopolitical concerns and upbeat economic data.

Oil prices fell about 5pc to a two-week low on Tuesday on expectations the ceasefire between Israel and Iran will reduce the risk of oil supply disruptions in the Middle East.

That ceasefire, however, was on shaky ground, with US President Donald Trump accusing both Israel and Iran of violating it just hours after it was announced.

Brent crude futures fell $3.29, or 4.6pc, to $68.19 a barrel at 10:43 EDT (1443 GMT), while US West Texas Intermediate (WTI) crude fell $3.20, or 4.7pc, to $65.31.