Shares at the Pakistan Stock Exchange (PSX) climbed by 6079.16 points after an earlier halt in trading on Tuesday, in the wake of US President Donald Trump announcing a complete ceasefire between Israel and Iran to end a 12-day war.

The KSE-100 index climbed by 6079.16 points, or 5.23 per cent, to close at 122,246.63 points.

Earlier in the day, shares at the PSX had climbed by 5,878 points a few hours after it opened. It reached an earlier intraday high of 122,045.62 from the last close of 116,167.47 yesterday, before a market halt was initiated.

Yousuf M. Farooq, director of research at Chase Securities, attributed the rise to the overnight announcement of a ceasefire, with broad-based gains across sectors.

Farooq said, “The Pakistan market rallied earlier today following the overnight announcement of a ceasefire.

“However, reports during the day of Israeli claims that Iran has violated the ceasefire dampened sentiment, pulling the market down from an intraday high of 122,045.62 to 121,926.63 currently. Despite the pullback, local fundamentals remain intact, and the rally could resume if the ceasefire holds. Geopolitical developments will continue to drive market direction in the near term.

Global shares rallied and the dollar extended declines as a ceasefire to end a 12-day war between Iran and Israel came into effect, while oil prices dived to nearly two-week lows on easing concerns about supply disruptions, Reuters reported.

At 11:26am, a PSX notice informed that due to a 5pc increase in the KSE-30 index from the previous trading day close of the index, a market halt had been triggered as per PSX regulations and all equity and equity-based markets have been suspended accordingly.

The market reopened after a gap of an hour at 12:31pm.

Farooq explained, “If the KSE-30 Index moves ±5pc from the previous day’s close and remains at that level for five consecutive minutes, trading is stopped for 60 minutes.”

He added that this mechanism kicks into action whether the index rises by 5pc or falls by that margin to help cool the market down.

The PSX had endured a sharp sell-off on Monday, as escalating geopolitical tensions in the Middle East — sparked by reported US airstrikes on Iranian nuclear facilities and Tehran’s threat to close the Strait of Hormuz — sent shockwaves through global markets, triggering panic selling and wiping out more than 3,800 points from the benchmark KSE-100 index.

The Israeli government said it had achieved all its objectives in the war with Iran, and that it had agreed to the US-proposed ceasefire after removing the “dual existential threat” of Tehran’s nuclear programme and ballistic missiles. Israel nonetheless warned it would “respond forcefully” to any Iranian violation of the truce.

Oil prices fell 5pc after Israel agreed to the proposal.

The ceasefire agreement, as outlined by Trump on social media in a surprise late-night post, would see the arch enemies stop firing in staggered phases.

According to Trump, Iran would unilaterally halt all operations beginning 4am GMT (9am PKT) on Tuesday, with Israel following suit 12 hours later.

After Trump’s announcement, Iran’s Foreign Minister Abbas Araghchi posted on social media that “as of now, there is no ‘agreement’ on ceasefire or cessation of military operations”.

However, he added that if Israel stopped “its illegal aggression”, Tehran would have “no intention to continue our response afterwards”.

Additional input from AFP.