Benchmark KSE-100 index jumps 9% amid ceasefire agreement, IMF approval, and monetary easing.
KARACHI: The Pakistan Stock Exchange (PSX) experienced a spectacular rally on Monday, with the benchmark KSE-100 index surging nearly 10,000 points, or 9%, following a combination of positive developments that boosted investor sentiment. The index opened on a strong note and climbed to 117,104.11 points, reflecting an increase of 9,929.48 points, or 9.26% by 09:30 am.
Key factors driving the surge included the recent ceasefire deal between India and Pakistan, the International Monetary Fund’s (IMF) approval of critical funding for Pakistan, and a rate cut by the State Bank of Pakistan. Positive global cues also helped lift investor confidence. Across the market, sectors such as banking and energy saw widespread buying activity, with index-heavy stocks like HUBCO, NRL, MARI, OGDC, PPL, POL, PSO, and HBL showing strong gains.
According to Arif Habib Limited (AHL), the market briefly halted after the KSE-30 index surged by 9.25%, hitting the upper circuit breaker limit. The KSE-100 index also saw its highest intraday point increase in recent memory, marking an 8.84% rise, or 9,475 points.
The brief trading halt is the first of its kind in two years, reflecting significant investor optimism. Trading resumed after 60 minutes, and by 13:45 pm, the KSE-100 index was still up by 9.07%, reaching 116,898.08 points, a 9,723.45-point increase from the previous close.
AHL’s report indicated that the ceasefire agreement between India and Pakistan is one of the most significant catalysts for the rally, as it sharply reduces geopolitical risk in the region. This follows weeks of tension after the Pahalgam attack and a series of aggressive sell-offs. Additionally, a statement from US President Biden reaffirming support for resolving the Kashmir issue and fostering trade relations between the two nations further lifted sentiment.
Investor optimism was further bolstered by Pakistan securing a vital financial lifeline with the IMF’s approval of a $1 billion disbursement under the Extended Fund Facility (EFF) and $1.4 billion under the Resilience and Sustainability Facility (RSF). This approval signals international backing for Pakistan’s reform agenda and strengthens investor confidence.
Adding to the positive sentiment, the State Bank of Pakistan’s recent decision to cut the policy rate by 100 basis points to 11% is expected to ease inflationary pressures, boosting valuations, especially in leveraged and cyclical sectors.
Since April 22, 2025, the KSE-100 had fallen by 12.6% due to geopolitical concerns, but Monday’s surge marks a dramatic reversal in market sentiment. The PSX had closed the previous week in the red, losing over 6,900 points. However, the market showed signs of resilience on Friday, recovering from earlier losses.
Global stock markets also showed strength, with US S&P 500 futures gaining 1.2%, Hong Kong’s Hang Seng rising 1.7%, and European markets experiencing gains, including a 0.9% rise in the EUROSTOXX 50. These international developments helped boost the overall optimism in the market.
The combined effect of easing geopolitical tensions, financial support from the IMF, and positive monetary policy actions has set the stage for a stronger market outlook in Pakistan.