PSX witnesses unprecedented rally, trading halted after minutes

KARACHI: The Pakistan Stock Exchange (PSX) temporarily stopped trading due to an unusual surge in the market following the staff-level agreement between Pakistan and the International Monetary Fund (IMF) last week.

The market opened at 43,583.78 points and quickly experienced a significant increase, with the benchmark KSE-100 index rising by over 5 percent or 2,269 points within the first 5 minutes.

When the KSE-30 index started trading with a 5 percent increase, it triggered a regulation that mandated a halt in trading if the index continued to trade 5 percent above or below its previous closing value for 5 consecutive minutes. As a result, trading in all securities was paused for a specified duration.

During this period, the KMI-30 index rose by 3,916.89 points to reach 74,665, while the KSE All share index jumped by 1016.7 points to 29,127.76.

Trading is scheduled to resume at 10:37 AM.

During the market halt, several measures were implemented, including the suspension of equity and equity-based derivative markets, a five-minute pre-open session before trading resumed, and the collection of margins and Mark-to-Market losses from Clearing Members. Only those Clearing Members who had deposited the required margins with NCCPL were allowed to trade after trading resumed for the day.

However, if the KSE-30 index exceeded a 5% movement during the duration prior to the market's close, the market halt would not be applicable.

The surge in the market today is a response to the $3 billion staff-level agreement with the IMF that was reached last week. In an effort to secure the stalled rescue package, the government introduced budget changes for the upcoming fiscal year, including a significant interest rate hike to 22%.

This IMF deal, which comes after an eight-month delay, provides some relief to Pakistan, which has been facing a severe balance of payments crisis and declining foreign exchange reserves. The $3 billion funding, spread over nine months, exceeds Pakistan's initial expectations.