Pakistan’s stock market staged a strong comeback on Tuesday as the benchmark KSE-100 index surged 9,696.98 points, closing in the green and gaining 6.62 per cent compared to the previous session. The rally signalled a sharp recovery in investor confidence after the market witnessed a massive decline a day earlier.

Soon after the opening bell, the index jumped 9,303.75 points, or 6.35pc, prompting a temporary trading halt under regulations of the Pakistan Stock Exchange (PSX). According to an official notice, the halt was triggered when the KSE-30 index recorded a 5pc rise from the previous day’s close, activating the exchange’s market suspension mechanism. Trading resumed at 10:27am.

Following the resumption, the index climbed further and briefly crossed the 11,000-point mark before witnessing some profit-taking. By 12:55pm, the benchmark stood at 10,085.15 points, later trimming some gains before closing at 2pm with a net increase of 9,696.98 points.

The sharp rebound comes a day after the market suffered one of its steepest declines. On Monday, the KSE-100 index closed at 146,480 points, plunging 11,015 points (6.99pc) — the second-largest single-day drop in its history — wiping out more than Rs1.09 trillion from investors’ wealth.

Analysts attributed Tuesday’s recovery to the State Bank of Pakistan’s decision to keep the policy rate unchanged at 10.5pc, along with improved global market sentiment amid easing tensions in the Middle East.