KSE-100 surges over 2,500 points to cross 170,000 mark

The advance gathered momentum as the outcome of the United States midterm elections raised hopes of a possible shift in Washington's approach to the war with Iran, fuelling expectations of diplomatic engagement and a potential easing of geopolitical tensions.

The buying spree reflected growing optimism among investors, who appeared willing to look beyond immediate uncertainties surrounding the conflict and focus on the possibility of a more stable regional outlook. Read:PSX gains over 1,400 points on renewed buying.

Investor sentiment also drew support from the outcome of the US midterm elections, in which Democrats secured control of both the House of Representatives and the Senate, wresting Congress from President Donald Trump's Republicans.

The sweeping victory marked a significant shift in the balance of power in Washington and is expected to usher in a period of divided government when the new Congress takes office in January 2027. Markets are weighing the implications of the Democratic victory for Trump's policy direction, particularly amid the continuing US-Israeli war on Iran.

Meanwhile, international oil prices rebounded after earlier declines, as investors awaited Washington's next move in the conflict. Brent crude futures rose 76 cents, or 0.7%, to $104.36 a barrel at 7:30am GMT, while US West Texas Intermediate crude futures gained 63 cents, or 0.7%, to $96.72 a barrel, reversing earlier losses.

The recovery in oil prices reflected continuing concerns over potential supply disruptions and uncertainty surrounding the Strait of Hormuz, despite hopes for progress towards ending the war. Investors were also monitoring diplomatic efforts, with Qatar stepping up mediation to avert further escalation.