The Pakistan Stock Exchange (PSX) staged a dramatic intraday reversal on Tuesday, erasing an 860-point rally to close 638 points lower, as investors rushed to lock in gains from the previous session's recovery. Yet beneath the red close, sector-specific buying and geopolitical tailwinds suggest the market's near-term trajectory remains upward, with analysts eyeing the 180,000 level as a key milestone. Main Developments The benchmark KSE-100 index opened positive, climbing to an intraday high of 179,123.01 — a gain of 860 points — before profit-taking wiped out all advances and pushed it to a low of 177,434.96. It eventually settled at 177,623.88, down 0.36 percent. Traded volume fell 7.8 percent to 958 million shares, with a total value of Rs41.5 billion. Cnergyico PK led the volume chart, with nearly 273 million shares changing hands, as the refinery sector stole the spotlight. Read also: Why Pakistan's investment pitch hinges on fixing trust gaps Background The profit-taking came after a spectacular overnight rally that had lifted the market sharply. The refinery sector's strong performance was driven by news that the Cabinet Committee on Energy (CCoE) had approved amendments to the Pakistan Oil Refining Policy 2023, removing hurdles that had delayed refinery upgrade agreements since the policy was first notified in August 2023. Attock Refinery, Pakistan Refinery, National Refinery, and Cnergyico PK all ended higher, outperforming the broader market. Conversely, United Bank, Oil and Gas Development Company, Hub Power, Pakistan Petroleum, and Bank of Punjab collectively shaved around 318 points off the index. Why It Matters Early trading sentiment had been bolstered by two key developments: the United States and Iran extended their pause in hostilities, with attention shifting to talks involving Tehran and Oman on resuming traffic through the Strait of Hormuz — a critical chokepoint for global oil shipments. Separately, Pakistan and China signed investment and commercial agreements worth around $1.4 billion at the Pakistan-China Business Conference, aiming to boost industrial collaboration, technology transfer, and local manufacturing. These factors suggest the underlying fundamentals remain supportive, even as short-term profit-taking pressures the index. The refinery policy amendments could unlock long-stalled upgrade investments, while the US-Iran pause reduces geopolitical risk premiums. What's Next Analysts at Arif Habib Ltd noted that after a period of consolidation, the 180,000 level remains the KSE-100 index's near-term target. Market participants will watch for continued progress on refinery upgrades and further developments in US-Iran talks, as well as the implementation of the Pakistan-China agreements.