Karachi, May 12, 2025: The Pakistan Stock Exchange (PSX) witnessed an unprecedented rally on Monday, with the benchmark KSE-100 Index surging by nearly 10,000 points, following a ceasefire agreement between Pakistan and India and the International Monetary Fund’s (IMF) approval of a long-awaited loan tranche.
In the opening session of the trading week, investor confidence soared, driving the index up by 9,928 points to reach 117,104.11 — a record-breaking single-day gain. The momentum continued, pushing the index to 116,650.12 points, up 8.84%, before an automatic market halt was triggered due to the sharp rise.
Market analysts attributed the historic surge to a confluence of positive developments, with the ceasefire announcement emerging as the key catalyst. The breakthrough came after weeks of heightened geopolitical tensions triggered by the Pahalgam attack, which had previously rattled investors and prompted aggressive sell-offs.
Adding to the optimism, the IMF on May 9 approved a $1 billion disbursement for Pakistan under the Extended Fund Facility (EFF), marking a major step forward in the country’s economic stabilization efforts. The IMF also endorsed Pakistan’s participation in the $1.4 billion Resilience and Sustainability Facility (RSF), although the latest disbursement pertains only to the EFF.
The financial boost follows Pakistan’s successful completion of key structural benchmarks, including improvements in its tax-to-GDP ratio, maintaining a primary fiscal surplus, and achieving provincial fiscal targets. The disbursement is expected to strengthen foreign exchange reserves, ease fiscal pressures, and support economic momentum amid global economic uncertainty.
Investor sentiment was further buoyed by the State Bank of Pakistan’s (SBP) decision to cut the policy rate by 100 basis points to 11%, signaling a shift toward growth-oriented monetary policy.
The rally comes on the heels of a turbulent week in the PSX. On Friday, the KSE-100 Index had already begun recovering, gaining 3,647 points to close at 107,174 following sharp losses earlier in the week. Broad-based buying was observed in key sectors such as automobile assembly, cement, banking, oil and gas, and power generation. Index heavyweights including HUBCO, MARI, OGDC, PPL, POL, PSO, and SNGPL all closed in the green.
Market watchers linked Friday’s bullish activity to anticipation surrounding the IMF board meeting and expectations of favorable outcomes.
Earlier in the week, however, the market had been gripped by panic. On Thursday, after a brief morning rally that took the index to 111,881, the market reversed sharply. The index dropped as much as 7,516 points to 102,492 before trading was halted. It eventually closed at 103,526, down 6,482 points for the day. Combined with Wednesday’s losses, the PSX had shed over 12,000 points across two sessions amid escalating geopolitical fears.
Now, with geopolitical tensions easing and crucial financial support secured, market experts suggest that the PSX may be entering a phase of renewed stability and growth.
