The Pakistan Stock Exchange (PSX) benchmark index, the KSE-100, opened the week with a strong upward trend, surging over 6,000 points during intraday trading.By 2:13pm, the index reached 177,310.70 points, up from a previous close of 171,021.20.

Analysts attribute the rally to eased geopolitical tensions between the US and Iran, which paused military strikes, and a sharp decline in global oil prices.

Awais Ashraf of AKD Securities noted that the pause in combat raised hopes for a diplomatic resolution to the Middle East conflict and the resumption of shipping through the Strait of Hormuz.This easing also increased the likelihood of the State Bank of Pakistan (SBP) maintaining the policy rate.However, ongoing disinflationary trends and a contraction in money supply support the case for monetary easing.Mettis Global linked the rally to geopolitical easing and falling oil prices, which improved investor sentiment.Oil prices fell over 7% as investors welcomed the pause in combat.The KSE-100 had previously lost 2.7% last week due to escalating tensions and rising oil prices.Despite the gains, concerns over the US-Iran conflict overshadowed domestic improvements like Pakistan's upgraded sovereign credit rating.