Islamabad (TDI): The Pakistan Stock Exchange (PSX) witnessed an unprecedented surge on Monday as investor sentiment soared following two major developments: the announcement of a ceasefire agreement between Pakistan and India, and the International Monetary Fund’s (IMF) approval of critical financial support for the country.
The benchmark KSE-100 index skyrocketed by a staggering 9,475.49 points, closing at 116,650.12 — reflecting a record-breaking 8.84% increase. The historic rally prompted a one-hour suspension of market activity due to volatility safeguards being triggered.
Earlier in the opening session, the index reached an intraday high of 117,104.11 points, signaling renewed investor confidence.
Market analysts attributed this bullish momentum to the convergence of significant political and economic developments. Foremost among them was the announcement of a ceasefire agreement between Pakistan and India, following weeks of heightened border tensions, especially after the Pahalgam incident.
Read More: PSX Plunges Over 3,000 Points Amid Pakistan-India Tensions
The ceasefire has been widely welcomed, including by the United Nations Secretary-General, and is seen as a stabilizing force for regional peace and economic prospects.
In a positive development, the IMF has authorized the release of a $1 billion loan tranche through the Extended Fund Facility (EFF), supporting Pakistan’s economic reform initiatives.
This approval comes after Pakistan successfully met essential structural benchmarks, such as improving its tax-to-GDP ratio, maintaining a primary fiscal surplus, and adhering to provincial fiscal targets.
The Executive Board also acknowledged Pakistan’s participation in the Resilience and Sustainability Facility (RSF), although the current disbursement pertains solely to the EFF.
The combined financial support, including an additional $1.4 billion under the RSF, is expected to enhance foreign exchange reserves and ease fiscal pressures.
Read More: India Humbled Again: IMF Approves $2.4bn Loan for Pakistan
Moreover, the State Bank of Pakistan’s (SBP) move to reduce the policy rate by 100 basis points to 11% further fueled investor optimism, signaling a potential downward trajectory in inflation and a more accommodative economic environment.
These cumulative developments have not only revived investor confidence but also positioned the country on a firmer path toward economic stability.
Experts view this historic day as a turning point, where sound macroeconomic management and regional peace have combined to restore market strength and optimism.
Areeba Kanwal is a contributor at The Diplomatic Insight and has passion for International Relations and diplomacy.
