Pakistan Stock Market logs biggest single-day gain in 26 years

Pakistan’s stock market set a new record on Monday with share prices rising over nine per cent on the day, as the country moved beyond last week’s conflict with India. The rise was a record in almost 26 years, creating a new milestone in Pakistan’s history of investments.

The new record was set as investors, who were driven by nervousness before the weekend, on Monday appeared relaxed over the foreseeable future.

Reports of the India-Pakistan ceasefire brought an important new comfort level, as many investors were convinced on Monday that last week’s initial attacks by India were not likely to be repeated.

The lift to share prices on Monday was also helped with news of a slight rise in the exchange rate of the Pakistani rupee versus foreign currencies. With the Indo-Pak conflict concluding on a ceasefire first sought by India, many market watchers expected to see the government focus primarily on Pakistan’s domestic conditions.

Monday’s robust performance also came on the first day of the market’s trading after news came late on Friday of the International Monetary Fund (IMF) approving its latest tranche of just over one billion U$ for Pakistan.

This came after reports on Friday speaking of Indian officials in Delhi and Washington seeking to persuade the IMF to at least delay their decision on releasing further funds to Pakistan. Nevertheless, that was to no avail.

Events after the four days before Saturday’s ceasefire also helped to lift the public’s morale across Pakistan. The country’s successful response to the Indian attack which began late night on Tuesday, helped to renew popular confidence in Pakistan’s armed forces.

While the PAF fought the Indian air force in the skies, the Pakistan Army faced the Indian army’s onslaught along the line of control in Kashmir. Several reports during the four-day conflict spoke of Indian forces raising the white flag in a sign of seeking to pull back from that spot, likely after suffering heavy losses. Meanwhile, the Pakistan navy successfully blocked the Indian navy’s advance across the Indian Ocean and in to the Arabian Sea along Pakistan’s southern coastline.

Together, Pakistan’s military response to India has lifted the mood among investors, and for now established a powerful new reality. For Pakistan’s investors, events of the past week have proven beyond doubt that any apprehensions, if they had any over Pakistan’s border security must now be easily set aside.