KARACHI: The Pakis­tan Stock Exchange (PSX) staged a robust recovery on Friday, buoyed by strong year-on-year growth in large-scale manufacturing and easing geopolitical concerns, as investors indulged in aggressive value-hunting after days of caution.

Market sentiment improved after US President Donald Trump signalled that the crackdown on protesters in Iran was easing, reducing fears of a broader regional military conflict that could disrupt oil supplies. The apparent calm-down boosted investor confidence, prompting broad-based buying across key sectors, particularly oil and gas, fertilisers, and banking.

According to Topline Securities Ltd, bulls dominated the trading session as the benchmark KSE-100 index surged to close at 185,099.83, rallying 3,642.49 points or 2.01 per cent mainly supported by local institutional buying.

Oil and Gas Development Company, Pakistan Petroleum, Hub Power, Engro Holdings, Fauji Fertiliser, United Bank and Meezan Bank emerged as the top contributors, together adding 1,725 points to the index.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, said the market closed on a strong bullish note amid improved global cues and encouraging domestic indicators. “The easing of geopolitical uncertainty in the Middle East triggered across-the-board buying, reinforcing positive momentum at the local bourse,” he noted.

On the macroeconomic front, the government kept petrol and diesel prices unchanged for the Jan 16-31 fortnight, as higher petroleum levies offset lower ex-refinery prices. The Inland Freight Equalisation Margin edged down slightly, while oil marketing companies’ margins remained flat at Rs7.87 per litre.

Meanwhile, data showed that large-scale manufacturing output expanded by 10.4 per cent year-on-year in November 2025, though month-on-month growth remained muted at 0.2 per cent. Inflationary pressures persisted, with the Sensitive Price Index rising 3.87pc year-on-year and 0.25pc on a weekly basis.

Trading activity remained brisk, with volumes rising 17.01pc to 959 million shares, while traded value jumped 51.08pc to Rs69.46 billion. Arif Habib Corporation led the volume chart, with 72.9 million shares changing hands.

Analysts believe the market could retest its all-time high of 187,905 in the coming week, provided geopolitical calm and positive macroeconomic trends continue.