In a rare turn of events, the Pakistan Stock Exchange (PSX) saw one of its steepest single-day rallies on Monday, with the benchmark KSE-100 Index jumping by close to 10,000 points in the first few hours of trading.
A combination of favorable developments, led by a historic ceasefire deal between India and Pakistan and the approval by the International Monetary Fund (IMF) of new funding packages, drove the spectacular surge.
At 9:30am, the KSE-100 Index was at 117,104.11 — a gain of 9,929.48 points or 9.26% — inducing a brief market stoppage by reason of excessive upward pressure.
This all-time peak represents the best run of the index in recent history as investors were optimistic to region de-escalation and assurance of finance provided by international organizations.
Market Mood Shifts Suddenly
Increased cross-border tensions after the April 22 Pahalgam attack had bruised investor sentiment in recent weeks, but it bounced back strongly. The news of a ceasefire between India and Pakistan — widely seen as a major diplomatic coup — served to allay fears of long-term instability in the region.
The IMF supplemented the upbeat momentum by approving a $1 billion disbursement under its Extended Fund Facility (EFF) and another $1.4 billion under the Resilience and Sustainability Facility (RSF) over the weekend.
These flows should support Pakistan’s foreign exchange reserves and give it fiscal room to better manage its balance of payments.
Adding to the optimistic atmosphere was a recent utterance by the US President, who voiced firm support for resolving the Kashmir conflict and urged increased economic cooperation between India and Pakistan. The comments were interpreted as an indication of Washington’s active re-entry into South Asian peace initiatives.
