- IMF’s dual approval not only ensures immediate external financing but also signals international endorsement of Pakistan’s reform agenda, says AHL
Bulls made a spectacular comeback on the Pakistan Stock Exchange (PSX) on Monday, as the benchmark KSE-100 Index opened with a nearly 10,000-point rally, reflecting a 9% surge.
According to the PSX website, benchmark KSE-100 opened on a bullish note and climbed to 117,104.11 points, an increase of 9,929.48 points, or 9.26% as of 09:30 am.
This market rally was driven by a combination of factors, including the recent ceasefire deal between Pakistan and India, and the International Monetary Fund’s (IMF) approval of crucial funding for Pakistan and a monetary easing by the State Bank of Pakistan in the form of a rate cut.
Across the board, buying momentum was observed in key sectors, including banking and energy stocks. Index-heavy stocks such as HUBCO, NRL, MARI, OGDC, PPL, POL, PSO, SNGPL, SSGC, HBL, MEBL, MCB, and UBL traded in the green.
“Market halted at the upper cap of the circuit breaker. Bullish sentiment and strong buying activity have triggered a market halt at the PSX, as the KSE-30 index surged by 9.25%,” brokerage firm Arif Habib Limited (AHL) said.
The brokerage firm further said that the benchmark KSE-100 index saw a substantial gain of 8.84%, rising by 9,475 points, marking the highest intraday point increase on a day-over-day basis.
According to market rules, if the KSE-30 Index moves by ±5% from the previous day’s close and stays at that level for 5 consecutive minutes, trading will be paused for 60 minutes. Likewise, for each stock priced at Rs 10 or above, the maximum daily price movement (either up or down) is capped at 10%.
Trading resumed at 10:42 am after the brief suspension. The rally marked the first upside market halt in two years, a sign of significant investor confidence.
At 13:45 pm, the KSE-100 index was trading at 116,898.08 level, up by 9723.45 points or 9.07% from the previous close of 107,174.63 points.
“We anticipate the KSE-100 index to post a strong rally, potentially gaining 6–7%, while we believe many stocks will close to the upper limit of 10% as investor sentiment flips from fear to opportunity,” AHL wrote in a note.
The brokerage firm said that the most significant catalyst is the ceasefire agreement between India and Pakistan — a major diplomatic achievement that sharply lowers geopolitical risk in the region. The announcement comes after weeks of tension following the Pahalgam attack, which had triggered aggressive selloffs and fueled widespread investor concerns.
Adding further momentum is the US President’s recent statement pledging support for resolving the Kashmir issue and encouraging enhanced trade relations between India and Pakistan. Pakistan’s exports to the US reached $4 billion in FY25, compared to imports of $1.5 billion, delivering a sizable trade surplus of $2.5 billion.
Amid easing regional tensions, Pakistan has secured a crucial financial lifeline with the IMF’s approval of a $1 billion disbursement under the Extended Fund Facility (EFF) and a $1.4 billion Resilience and Sustainability Facility (RSF).
AHL said that the IMF’s dual approval not only ensures immediate external financing support but also signals international endorsement of Pakistan’s reform agenda, further strengthening investor confidence amid improving macroeconomic stability.
“These developments coincide with the SBP’s recent decision to cut the policy rate by 100 bps to 11% — a move that reflects easing inflationary pressure and is expected to boost equity valuations, particularly in leveraged and cyclical sectors,” the brokerage firm’s note read.
Since April 22, 2025, the KSE-100 Index had fallen by 12.6%, driven by geopolitical tensions. The PSX had closed the previous week in the red, with the index shedding 6,939 points, or 6.1%, amid persistent uncertainty surrounding regional stability. The market had shown resilience on Friday, recovering from earlier losses.
Internationally, positive developments in US-China trade talks also helped boost investor sentiment, with global stock futures rising. US S&P 500 futures gained 1.2%, while Hong Kong’s Hang Seng Index rose 1.7%. European markets also showed strength, with the EUROSTOXX 50 rising by 0.9%.
These positive global cues contributed to a broader sense of optimism in the market, with signs of a potential de-escalation of geopolitical tensions in the region.
In Asia, Japanese stocks gained 0.3%, while South Korea’s market rose by 0.4%, showing signs of recovery in global equities.
