In a historic surge, the Pakistan Stock Exchange (PSX) witnessed one of its most significant single-day rallies on Monday, with the KSE-100 Index climbing nearly 10,000 points in early trading. This exceptional performance marked a 9.26% gain, pushing the index to 117,104.11 by 9:30 AM and triggering a temporary halt in market activity due to the rapid rise.
The sharp upswing was driven by a combination of major positive developments. A landmark ceasefire agreement between India and Pakistan helped ease geopolitical tensions that had escalated following the April 22 Pahalgam attack. The diplomatic breakthrough was widely welcomed as a sign of regional de-escalation, which greatly boosted investor confidence.
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Further strengthening the bullish momentum was the International Monetary Fund’s approval of two key funding packages over the weekend. Pakistan secured a $1 billion disbursement under the Extended Fund Facility (EFF) and an additional $1.4 billion through the Resilience and Sustainability Facility (RSF). These financial inflows are expected to ease pressure on the country’s foreign exchange reserves and enhance macroeconomic stability.
Adding to the optimism, a statement by the US President emphasized support for resolving the Kashmir dispute and encouraged greater economic collaboration between India and Pakistan. The international backing signaled renewed global engagement in South Asian peace efforts, amplifying market optimism.
Brokerage firms reported a major shift in investor sentiment, moving from risk aversion to renewed interest in equities. With easing geopolitical concerns and improved economic outlook, many stocks were seen reaching their daily upper limits. Last week, the PSX had plunged by 6,939 points due to ongoing tensions, but Monday’s rebound has erased much of that loss.
The surge in Pakistan’s market coincided with a global rally. US futures rose on hopes of progress in US-China trade negotiations, while key European and Asian indices also posted gains. The S&P 500 and Nasdaq futures advanced 1.2% and 1.4%, respectively. European benchmarks including EUROSTOXX 50, DAX, and FTSE climbed between 0.4% and 0.9%, while Asian markets such as Japan’s Nikkei and South Korea’s KOSPI registered modest gains.
Analysts now view the PSX rally as a potential turning point for Pakistan’s financial markets. While economic challenges persist, including inflation and structural inefficiencies, the combination of diplomatic progress and IMF support has sparked cautious optimism. Investors are closely watching whether this momentum can be sustained and lead to a broader recovery in the coming weeks.
