Pakistan stocks witness historic rally after ceasefire with India

KARACHI: The Pakistan Stock Market witnessed a historic session on Monday, as the benchmark KSE-100 Index surged 9.45 per cent in a single day — the highest one-day gain in 26 years, analysts said.

The sharp rally was driven by a surprise ceasefire announcement between Pakistan and India, brokered by the United States over the weekend.

The development boosted investor confidence, alongside the International Monetary Fund’s (IMF) approval of the first review of the Extended Fund Facility (EFF), which unlocked a $1 billion tranche.

“Market optimism surged following the unexpected ceasefire and IMF’s nod on the EFF review,” Topline Securities Ltd said in a research note.

Market capitalisation jumped from Rs12.9 trillion ($45.8 billion) to Rs14 trillion ($49.8 billion), reflecting an 8.7 per cent increase on a day-on-day basis.

“The historic surge was broad-based, supported by the ceasefire between Pakistan and India, former US President Donald Trump’s offer to mediate on Kashmir, and his commitment to boost bilateral trade,” Ahsan Mehanti, CEO of Arif Habib Commodities, told HUM News English.

Mehanti added that a global rally in equities and crude oil prices following the U.S.-China trade deal, a stable rupee amid IMF approval, and the State Bank of Pakistan’s surprise 100 bps rate cut to 11 per cent also contributed to the bullish sentiment.

The rally comes after weeks of turbulence following the April 22, 2025 incident in Pahalgam in Indian illegally Occupied Jammu and Kashmir, which triggered heightened Indo-Pak tensions. The KSE-100 Index had fallen 12.5 per cent over 12 sessions before staging a 3.5 per cent recovery on May 9.

Gold prices in Pakistan drop by over Rs10,000 per tola

Trading was temporarily halted within five minutes of market opening on Monday, as the index surged 9.26 per cent.

According to exchange rules, a one-hour trading halt is triggered if the KSE-30 moves 5 per cent in either direction and sustains that level for five minutes.

Several positive domestic indicators had earlier been overshadowed by geopolitical tensions, including April 2025’s record low inflation of 0.3 per cent year-on-year, the IMF’s scheduled review of Pakistan’s EFF programme, and the SBP’s rate cut.

Trading value in the ready market reached Rs30.4 billion — up 5.3 per cent from the previous day. At the upper circuit, investor bids totaled Rs13 billion across both ready and futures markets.

Heavy interest was seen in PPL, MLCF, and PSO, which attracted combined bids of Rs2.2 billion, Rs1.4 billion, and Rs0.9 billion respectively.