The Pakistan Stock Exchange (PSX) staged a strong comeback on Monday, driven by a “convergence of positive developments” including a ceasefire agreement between India and Pakistan, as well as the International Monetary Fund’s (IMF) approval of crucial funding. The benchmark KSE-100 Index gained 10,123 points, the highest-ever gain, on Monday.
The benchmark index kicked off trading with a bang, jumping to an intra-day high of 117,104.11, an increase of 9,929.48 points or 9.26%.
“As expected, the Pakistani stock market rallied at the open with the KSE 100 index opening up at a record 9,900 or 9.3%. Sentiments are extremely positive after the ceasefire and approval of the loan tranche by the IMF at the weekend,” said Mohammed Sohail, CEO of Topline Securities, in a note earlier during the day.
Following a 9% jump, market operations were halted temporarily.
“Due to a 5% increase in the KSE-30 index from the previous trading day’s close of the index, a Market Halt has been triggered as per PSX
regulations, and all equity and equity-based markets have been suspended accordingly,” the PSX notice read.
“This upside market halt has happened after two years,” said Sohail.
The market later opened at 10:42am, with bullish momentum continuing thereafter.
At close, the benchmark index settled at 117,297.73, an increase of 10,123.10 points or 9.45%.
Earlier, across-the-board buying momentum was observed in key sectors, including banking and energy stocks. Index-heavy stocks including HUBCO, NRL, MARI, OGDC, PPL, POL, PSO, SNGPL, SSGC, HBL, MEBL, MCB and UBL traded in the green.
“A powerful convergence of positive developments has set the stage for a potential resurgence in the PSX, with Monday’s session expected to open on a markedly bullish note,” said Arif Habib Limited (AHL) in its report on Monday.
The brokerage house anticipates the KSE-100 index to post a strong rally, potentially gaining 6 – 7%, while believing many stocks will close to the upper limit of 10% as investor sentiment flips from fear to opportunity.
“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,” read the report.
“Together, the ceasefire, IMF support, monetary easing, and the positive shift in trade relations with the US form a powerful trifecta of bullish triggers just as the market attempts to recover from its recent sharp correction that began on April 22, 2025, following the Pahalgam attack and subsequent regional tensions,” read the report.
AHL noted that since April 22nd, 2025, the KSE-100 index has declined by 12.6%.
During the previous week, the PSX closed in the red, as mounting geopolitical tensions between Pakistan and India weighed heavily on investor sentiment.
Persistent uncertainty surrounding regional stability prompted widespread caution, dragging market performance down throughout the trading week except Friday, when it showed a strong recovery.
The benchmark KSE-100 Index shed 6,939 points, or 6.1%, on a week-on-week basis, closing at 107,175 points compared to 114,114 points in the previous week.
Internationally, Wall Street stock futures climbed and the dollar firmed against safe haven peers on Monday as signs of progress in US-China trade talks boosted hopes a global recession might be avoided, though details of any deal were still to come.
Geopolitical tensions also looked to be easing as a fragile ceasefire held between India and Pakistan, while Ukrainian President Volodymyr Zelenskiyy said he was ready to meet Vladimir Putin in Turkey on Thursday for talks.
Over in Geneva, US Treasury Secretary Scott Bessent touted “substantial progress” in trade discussions, while Chinese officials said the sides had reached “important consensus” and agreed to launch another new economic dialogue forum.
A joint statement is expected later on Monday, though it was notable that neither side mentioned tariff rates specifically.
Markets reacted by pushing S&P 500 futures up 1.2%, while Nasdaq futures rose 1.4%. EUROSTOXX 50 futures firmed 0.9%, while FTSE futures added 0.4% and DAX futures 0.7%.
Japan’s Nikkei edged up 0.3%, while South Korea gained 0.4%.
Meanwhile, the Pakistani rupee inched up against the US dollar, appreciating 0.05% in the inter-bank market on Monday. At close, the local currency settled at 281.57, a gain of Re0.14 against the greenback.
Volume on the all-share index increased to 732.88 million from 516.29 million recorded in the previous close.
The value of shares rose to Rs30.38 billion from Rs28.84 billion in the previous session.
K-Electric Ltd was the volume leader with 114.46 million shares, followed by At-Tahur Ltd with 75.91 million shares, and WorldCall Telecom with 66.04 million shares.
Shares of 405 companies were traded on Monday, of which 405 registered an increase, 26 recorded a fall, while 31 remained unchanged.
