Market analysts said the decision of the government to hold talks with cleric Tahir ul Qadri, whose agitation coupled with a Supreme Court order to arrest the Prime Minister, had caused much political uncertainty had prompted the recovery today.
"The fact that all political parties have also consensus on election dates has also led to a positive feel in the market," an analyst said.
He said after the news of a government delegation meeting with Allama Qadri came, the mid-day stocks were active and there was improved trading.
The greatest volumes of trade occurred in Fauji Cement stocks, followed by finance firm Jahangir Siddiqui and Byco Petroleum.
The Karachi Stock Exchange's (KSE) benchmark 100-share index ended 0.68 per cent, or 109.62 points, higher at 16,291.09.
The Pakistani stock market had plummeted more than 500 points on Tuesday as the KSE reeled from a flurry of buying and selling in the wake of the political uncertainty in the country.
A total volume of 170.14 million shares were traded on Tuesday with analysts saying that over 130 billion rupees were wiped out from market capitalisation which was the worst single day decline in over four years in the KSE.
Today, Fauji Cement rose 2.37 per cent to 6.90 rupees per share while Byco Petroleum was up 3 per cent to 13.37 rupees per share.
The foreign currency trading also stablised with the Pakistani rupee recovering to end the day steady at 97.58/97.65 against the green buck compared to yesterday's close of 97.58/97.64. Overnight rates in the money market remained flat at 9.40 per cent.
