The Karachi Stock Exchange's (KSE) benchmark 100-share index ended 2.30 percent, or 255.01 points, higher at 11,338.05. Turnover rose sharply to 77.8 million shares from only 36.45million traded on Monday.
Stocks gained sharply on Tuesday as investors accumulated shares at attractive levels after sharp falls in the index in recent days, dealers said.
Despite gains, the KSE-100 index is still down about 2 percent this month.
"I think with all the political turmoil and foreign selling in recent weeks, the market had reached an oversold situation and an upwards correction was due, which we saw today," said Ashraf Zakaria, a dealer at brokers Ali Hussain Rajabali and Co.
Dealers said there were talks in the market regarding the resolution of a long-standing capital gains tax on stock investments, which also helped the sentiment.
"These market talks, coupled with the attractive prices, provided a perfect recipe for a bull-run in the market today, "said Zakaria.
