By Digital Spartans 
The Pakistan Stock Exchange (PSX) staged a powerful comeback on Friday, snapping a prolonged bearish spell and injecting renewed optimism into the market. Strong buying activity pushed the benchmark KSE-100 index sharply higher, reflecting improved investor sentiment amid signs of stability in the country’s foreign exchange reserves.
During intraday trading, the KSE-100 index surged by an impressive 3,146.23 points to reach 184,602.56 points, registering a gain of 1.70 percent. The rally marked one of the strongest single-day recoveries in recent sessions and signaled a decisive shift in market mood after days of uncertainty.
Market breadth also remained firmly positive. Out of 562 active listed companies, share prices of 375 advanced, while only 67 declined. The remaining 120 stocks traded unchanged, highlighting broad-based participation in the rally across multiple sectors.
Analysts attributed the rebound primarily to improving confidence driven by rising foreign exchange reserves and expectations of better macroeconomic management. The rally offered some breathing space for investors who had been cautious due to both domestic and international pressures.
According to the State Bank of Pakistan, the country’s foreign exchange reserves increased by $16 million during the past week. Official reserves rose from $16.0557 billion to $16.0718 billion, while total reserves climbed to $21.2484 billion. Commercial banks’ reserves also improved, increasing by $5.6 million to reach $5.1927 billion.
The central bank’s outlook further supported market sentiment. It projects the current account deficit for fiscal year 2026 to remain between 0 and 1 percent of GDP and expects foreign exchange reserves to rise to $17.8 billion by June 2026, supported by planned official inflows.
The strong recovery came a day after the market suffered heavy losses. On Thursday, the PSX had dropped by more than 1,100 points amid aggressive selling. Investor caution was largely driven by rising geopolitical tensions, particularly concerns surrounding Iran and the possibility of broader regional conflict.
During Thursday’s session, the KSE-100 index initially touched 183,717.53 points on early buying interest. However, the momentum faded as uncertainty took hold, and the index eventually closed at 182,500.52 points, down 69.29 points.
International developments continue to influence investor behavior. Reports from American, European, and Israeli sources have warned that US military intervention in Iran appears increasingly likely. Preparations for potential action, including the evacuation of personnel from a major US air base in Qatar, have heightened global market anxiety.
Despite these risks, Friday’s rally suggests that local investors are responding positively to improving economic indicators at home. While volatility remains a concern, the PSX rebound reflects cautious optimism that stabilizing reserves and supportive policy signals could help sustain market confidence in the near term.