The KSE-100 Index traded between a high of 173,444.89, gaining 3,532.94 points (2.08%), and a low of 170,758.25, up 846.30 points (0.50%), compared to the previous close of 169,911.95.

Market sentiment improved amid expectations of a diplomatic breakthrough, with investors rushing to take positions ahead of potential positive developments. Ahfaz Mustafa, CEO of Ismail Iqbal Securities, said the possibility of a deal and ongoing diplomatic activity has created a sense of urgency among investors.

Confidence was further supported after Donald Trump struck an optimistic tone, saying prospects for a deal with Iran were “looking very good” and that talks could resume soon. He also suggested that any agreement could include reopening the Strait of Hormuz, although Iran has not publicly indicated willingness to concede on key issues such as its enriched uranium stockpile.

Earlier, US Defence Secretary Pete Hegseth warned that Iran could face a blockade and infrastructure strikes if it failed to comply with US demands, highlighting ongoing tensions despite diplomatic efforts.

Global cues also supported markets, with reports that Gulf and European leaders are urging an extension of the ceasefire to allow more time for negotiations, while ensuring stability in energy supply routes.

Additional support came from a 10-day ceasefire between Israel and Lebanon that took effect on Thursday, offering some relief to regional tensions, though uncertainty remains over its sustainability.

On the domestic front, data from the State Bank of Pakistan showed the current account surplus widened to $1.07 billion in March, up from $231 million in February, driven by improved trade balances and strong remittance inflows.

However, on a cumulative basis, the surplus for the first nine months of FY2026 stood at $8 million, significantly lower than $1.674 billion recorded during the same period last year.

The improved external position, along with recent financial inflows from Saudi Arabia, has helped stabilise foreign exchange reserves ahead of upcoming debt repayments to the United Arab Emirates.

In the previous session, the KSE-100 Index had gained 1,392.01 points (0.83%) to close at 169,911.95, continuing its upward trajectory.