KARACHI: The benchmark KSE-100 Index at the Pakistan Stock Exchange (PSX) opened at 117,104.11 points on Monday, up by 9,929.48 points, marking the largest single-day increase in index points after a weekend ceasefire agreement with India.
Pakistan’s stocks rallied after US President Donald Trump announced a ceasefire between nuclear-armed neighbors India and Pakistan. Both states had exchanged missile, drone and artillery strikes last week amid surging tensions.
The development is a breath of fresh air for the stock market, which saw a record-breaking 6,482-point plunge last Thursday. This was the largest single-day decline in the index’s history as investors feared an escalation in the conflict between India and Pakistan.
“Pakistan Stock Market opens at a single-day record,” Khurram Schehzad, adviser to the finance minister, said in a statement. “A new record for a single day, way more than the single-day decline it recorded last week.”
Pakistani stocks also rallied after the International Monetary Fund (IMF) approved a loan program review for Pakistan on Friday. The IMF nod helped unlock around $1 billion in much-needed funds for Islamabad and greenlit a new $1.4 billion bailout despite New Delhi’s objections.
“Pakistan has much more to offer, given IMF’s board approval of $2.4 billion, further decline in interest rates, Pakistan’s measured and responsible response in both its narrative and actions on-ground,” Schehzad noted.
The official said these developments and a potential “positive” spillover effect of a likely settlement of the US-China tariff dispute, had caught investors’ eye and caused the stocks to rally.
Schehzad noted that renewed investor confidence, enhanced IMF funding and support, a low inflation rate and stable currency parities in the region all position Pakistan “for a more meaningful economic upside moving forward.”
Earlier during the day, a five percent increase in the KSE-30 index from the previous trading day’s close led to a market halt as per stock market regulations. All equity and equity-based markets were suspended, as per a notification of the PSX.
Markets reopened around 10:42 a.m. local time (0542 GMT).
