- The KSE-100 index increases to 117,297.73 points.
- PSX records a highest increase in the points at the end.
- The ceasefire is a most important catalyst.
The Pakistan Stock Exchange (PSX) opened its doors on Monday after tensions between Pakistan and India softened, the KSE-100 reference index jumping for more than 9%.
The reference index KSE -100 jumped at 117,297.73 points after an increase of 10,123.10 points or 9.45% – the highest increase in the points at the end – up compared to the previous fence of 107,174.63 points.
The positive impetus was motivated by two major developments: the cease-fire agreement between Pakistan and India, and the approval of the International Monetary Fund (IMF) of a critical loan tranche during the weekend.
Market players responded with a strong purchase activity in a context of improved geopolitical and economic perspectives. After rapid overvoltage, trade on the stock market was suspended – a circuit breaker to control excessive volatility – a few moments after the opening of the market. However, he resumed after an hour.
In a note, Arif Habib Limited noted that the most important catalyst is the cease-fire agreement between India and Pakistan-a major diplomatic achievement which greatly reduces geopolitical risk in the region.
The announcement comes after weeks of tension after the attack by Pahalgam, which had triggered aggressive sales and fueled the generalized concerns of investors.
The addition of dynamism is a subsequent momentum, the American president, Donald Trump, promised support for the resolution of the cashmere issue and to encourage improved trade relations between India and Pakistan.
“To underline, Pakistan exports to the United States reached $ 4 billion in FY25TD, against imports of $ 1.5 billion, offering a trade surplus of $ 2.5 billion,” said the brokerage house.
In the midst of the relaxation of regional tensions, Pakistan obtained a crucial financial rescue with the approval by the IMF of a disbursement of $ 1 billion under prolonged funding (EFF) and an ease of resilience and sustainability of $ 1.4 billion (RSF).
IMF double approval ensures immediate support for external financing, but also indicates the international approval of the Pakistan reform program, further strengthening investors’ confidence in improving the improvement in macroeconomic stability.
These developments coincide with the recent decision of the State Bank of Pakistan to reduce the rate of policy by 100 bp to 11% – a decision which reflects assistance to inflationary pressure and should increase equity assessments, in particular in the leverage and cyclic sectors.
Together, the ceasefire, the support of the IMF, the monetary relaxation and the positive change in trade relations with the United States form a powerful trifecta of bullish triggers just when the market tries to recover from its recent clear correction which started on April 22, following the attack by Pahalgam and the following regional tensions.
Since April 22, the KSE-100 index had decreased by 12.6% (May 8), with panic sales, with a drop in the intra-day panic point in the market history last week, although a net rebound of 3.5% on May 9 was referring to a change of feeling already in progress.