Pakistan's stock market staged a sharp recovery on Wednesday, with the benchmark KSE-100 index surging more than 1,700 points to close above the 175,000 mark, breaking a two-day losing streak. The rebound followed heavy selling triggered by geopolitical tensions and oil price spikes, as investors returned to value buying. Main Developments The KSE-100 index rose by 1,766.97 points (1.02 percent) during a volatile session, settling at 175,285.78 points, up from the previous close of 173,518.81. The index opened with a steep climb, hitting an intraday high of 176,701.38 points at 10:02 am—3,182.57 points above the prior close—before paring gains and fluctuating above the 174,000 mark until a steady rise in the final hours. Read also: Pakistan Offers Small Traders Voluntary Tax Scheme With Audit Exemption Wednesday's recovery was driven by value buying after Tuesday's steep losses, according to Mettis Global, a web-based financial portal. Awais Ashraf, director of research at AKD Securities, attributed the positive turn to US President Donald Trump replacing a proposed 20 percent toll on Strait of Hormuz traffic with investment commitments from GCC countries. Background Tuesday saw extreme selling pressure, with the KSE-100 index falling below 174,000 and equity investors losing Rs706 billion in a single session. The panic was fueled by geopolitical developments, including Trump's announcement of a 20 percent charge on ships navigating the Strait of Hormuz, which sent oil prices surging. Trump later backtracked, stating the strait was open to all shipping except Iranian traffic. Oil prices continued to rise on Wednesday, with Brent futures climbing 99 cents (1.2 percent) to $85.72 a barrel, and West Texas Intermediate gaining 64 cents (0.8 percent) to $79.98. The naval blockade on Iranian ports and retaliatory strikes by Tehran added to market uncertainty. Why It Matters Lower-than-expected US inflation has eased concerns over further Federal Reserve rate hikes, improving the outlook for capital flows into frontier markets like Pakistan and reducing pressure on the rupee, Ashraf noted. The market's resilience suggests investor confidence is stabilizing, despite ongoing geopolitical risks and oil price volatility. What's Next Investors will watch for further clarity on US-GCC investment commitments and any escalation in regional tensions. The KSE-100's ability to hold above 175,000 will be tested, with oil price movements and Fed policy signals remaining key drivers. The market's next session will reveal whether the rebound has lasting momentum.