Pakistani stocks rebounded sharply on Thursday after the government moved to secure crude oil supplies through Saudi Arabia's Red Sea port, easing fears of energy disruptions caused by tensions in the Middle East. The benchmark index rose 3.49 percent, recovering part of the heavy losses earlier in the week when panic selling triggered its largest single-day point decline.

Investor confidence improved after Saudi Arabia indicated it could facilitate oil shipments through the port of Yanbu if shipping routes near the Strait of Hormuz remain disrupted. Around one fifth of global oil and gas supplies pass through that corridor, and concerns over its closure had weighed heavily on Pakistan's energy outlook and financial markets.

Analysts said higher global crude prices and expectations that the International Monetary Fund would release the next tranche of its 7 billion dollar loan program also supported bullish sentiment. Strong institutional buying led the recovery, with major energy, fertilizer, banking and industrial stocks contributing significantly to the gains.

Market participants remain watchful of developments in the Gulf region, particularly regarding energy supply routes and the possibility of further escalation, as uncertainty continues to influence investor sentiment.