By Staff Reporter
KARACHI: Stock surged 9 percent on Monday, its biggest-ever single-day gain, as a ceasefire with India brokered by US President Donald Trump and a $1 billion IMF loan approval sparked a frenzy of buying, erasing losses from weeks of border tensions.
The benchmark KSE-100 index rocketed 10,123.10 points to close at 117,297.73, a 9.45% leap that forced a one-hour trading halt minutes after the opening bell when gains exceeded 5%.
“The market has reacted jubilantly to the ceasefire announcement after Pakistan established effective deterrence against India,” said Yousuf M. Farooq, research director at brokerage Chase Securities. “The PSX has saluted the Pakistan Air Force this morning with a surge of over 9% in the KSE-100 Index.”
The rally came after a volatile stretch for the market. On May 8, the KSE-100 cratered nearly 6,500 points, its second-worst intraday drop, when Pakistan downed 77 Indian drones amid escalating clashes that began with an April 22 incident in Pahalgam town of occupied Kashmir. By May 9, it clawed back 3.5 percent as tensions cooled, but Monday’s ceasefire news, announced Saturday, unleashed a flood of optimism.
President Trump, who mediated four days of talks to secure the ceasefire, hailed it as a win for regional stability. “We’ve stopped the fighting, and I’m telling you, we’re going to increase trade substantially with both Pakistan and India,” he said in post on his Truth Social, also offering to tackle the decades-old Kashmir dispute.
Investors cheered the prospect of calmer borders and stronger economic ties. The IMF added fuel to the fire, approving a $1 billion tranche on Friday under its Extended Fund Facility.
“The approval of the first review of the EFF program by the IMF, unlocking a $1 billion tranche, also boosted investors’ sentiments,” wrote analysts at Topline Securities in a Monday note. “A surprise interest rate cut by the State Bank of Pakistan last week further primed the rally.”
Market action was relentless. The KSE-100 leapt 9,929.48 points (9.26%) to 117,104.11 at the start, triggering the circuit breaker. By intraday it hit 117,327.78, up 10,153.15 points or 9.47%. Ready-market turnover climbed 5.3% to Rs30.4 billion.
“Local retail investors flipped from net sellers to aggressive buyers today,” said Samiullah Tariq, head of research at Pak Kuwait Investment Company Ltd. “They’re piling in directly and through mutual funds—it’s a three-pronged boost from the ceasefire, the IMF, and Trump’s trade pledge.”
The good news rippled beyond stocks. Pakistan’s dollar bonds soared, gaining up to 5.7 cents on the dollar, per Tradeweb data.
“This brief conflict has demonstrated our military and technological superiority over India,” said Awais Ashraf, director of research at AKD Securities. “That’s strengthening our geopolitical position and could mean better ties with Gulf nations, plus growth in defense and tech exports.”
Analysts now expect attention to shift to domestic fundamentals. “Market participants are gearing up for the federal budget on June 2,” Farooq said. “Assuming the ceasefire holds, that’s the next catalyst.”
The KSE-100’s 12-month run—up more than 80%—ranks it third globally, per Bloomberg data, a resilience forged through war scares and economic lifelines. Monday’s fireworks suggest investors are betting that streak isn’t over yet.
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