The Pakistan Stock Exchange (PSX) benchmark index reversed a two-day decline on Wednesday, climbing more than 1,700 points to settle above the 175,000 mark.
The sharp intraday rally marks a decisive shift in sentiment, with bulls regaining control after a period of sustained selling pressure.
Market participants attribute the turnaround to renewed value buying following the recent heavy selloffs.
Mettis Global noted that investors are engaging in value buying, while analysts described investor sentiment as "positive" following developments that reduced immediate geopolitical risks.
The rally comes as the United States steps back from imposing fees related to the Strait of Hormuz, easing concerns over shipping disruptions and energy supply chains.
This de-escalation has provided a tailwind for emerging market equities, including Pakistan's bourse, which had been weighed down by broader risk-off sentiment.