KARACHI: The Pakistan Stock Exchange (PSX) staged a powerful recovery on Friday, rebounding from its worst single-day drop in history, as the benchmark KSE-100 Index gained 3,647.82 points, or 3.52%, to close at 107,174.63.
The rally came just a day after the market plummeted by nearly 6,500 points, driven by fears of escalation following cross-border military tensions with India. However, Friday’s session was marked by renewed investor confidence, helped by relative calm on the geopolitical front and anticipation of fresh inflows from the International Monetary Fund (IMF).
During intraday trade, the benchmark index surged to a high of 105,946.01, with broad-based buying seen across major sectors. Key contributors to the rally included automobile assemblers, cement, commercial banks, oil and gas exploration companies, OMCs, and power generation stocks. Index-heavy companies like HUBCO, MARI, OGDC, PPL, POL, PSO, and SNGPL all traded in the green and helped propel the market upward.
“After falling sharply by 6% yesterday due to drone attacks, Pakistani stocks have recovered,” said Mohammed Sohail, CEO of Topline Securities, in a market note. “So far, there has been no news of any major escalation, helping restore confidence.”
The rally also came ahead of a crucial IMF Executive Board meeting scheduled for later in the day. The board will consider the first review under the Extended Fund Facility (EFF) and Pakistan’s request for a new $1.3 billion arrangement under the Resilience and Sustainability Facility (RSF).
If approved, Pakistan will immediately gain access to about $1 billion (SDR 760 million) under the existing $7 billion EFF program. This will bring total disbursements under the facility to around $2 billion. Additionally, the $1.3 billion climate resilience loan under the RSF is expected to provide further support over a 28-month period, easing pressure on the country’s external account and improving sentiment in financial markets.
On Thursday, the PSX witnessed a historic rout as the KSE-100 index nosedived to 103,526.82, losing nearly 6,500 points in response to heightened tensions following reported missile attacks and retaliatory action between Pakistan and India.
With investors seemingly pricing in a controlled de-escalation and looking ahead to macroeconomic support from the IMF, Friday’s performance reflected a sharp reversal of sentiment and a willingness to re-enter the market amid easing uncertainty.
Analysts note that while volatility may persist, Friday’s recovery underlines the market’s underlying resilience in the face of geopolitical shocks, especially when supported by external financing commitments and fiscal reforms.
