The Pakistani stock market recovered from a slump today and closed higher after the US made it clear there was no immediate chance of economic sanctions being imposed on the country in the wake of its gas pipeline deal with Iran.
Pakistan's main stock exchange in Karachi ended two percent or 350.29 points, higher at 17,872.85 points after the KSE had shed some 400 points yesterday after the Pakistani and Iranian Presidents inaugurated the gas pipeline project in Iran.
Market analysts said that following the announcement from the US state department, the apprehensions of economic sanctions against Pakistan had subsided for the time being.
"The stock market recovered today after investors sold shares in anticipation of possible sanctions," an analyst said.
Engro Corporation and Nishat Mills Ltd closed at their upper limit due to institutional buying, said Samar Iqbal of Topline Securities.
Pakistani stocks can only rise or fall five per cent a day, a rule meant to curb volatility in the market.
In the currency market, the rupee was steady at 97.85/97.90 against the dollar, compared to yesterday's close of 97.85/97.90.
