Monitoring Desk
The Pakistan Stock Exchange (PSX) witnessed a sharp rebound on Monday, with the benchmark KSE-100 Index soaring over 9% in early trade following a ceasefire agreement between Pakistan and India and renewed investor confidence driven by key economic developments.
The index surged by 9,929.48 points — a 9.26% jump — to reach 117,104.11 at 9:30am, up from the previous close of 107,174.63. The rally was so significant that trading was briefly suspended for an hour to prevent excessive volatility.
The ceasefire, brokered over the weekend by U.S. President Donald Trump, ended four tense days of cross-border hostilities. The development eased geopolitical uncertainty and brought relief to investors.
“The market has reacted jubilantly to the ceasefire announcement after Pakistan established effective deterrence against India,” said Yousuf M. Farooq, Director of Research at Chase Securities. “The PSX has saluted the Pakistan Air Force this morning with a surge of over 9%.”
Farooq also credited the recent cut in interest rates and the approval of a $1 billion tranche from the International Monetary Fund (IMF) as major catalysts behind the rally.
Samiullah Tariq, Head of Research at Pak Kuwait Investment Company, cited three key drivers: the ceasefire, the IMF disbursement, and U.S. President Trump’s public commitment to enhancing trade ties with Pakistan. “Investor sentiment has turned sharply positive,” he added.
President Trump, after helping mediate the ceasefire, also offered to assist in resolving the Kashmir dispute and pledged to “increase trade substantially” with both Pakistan and India.
Awais Ashraf, Director of Research at AKD Securities, said the recent military standoff has elevated Pakistan’s geopolitical profile. “This brief conflict has demonstrated Pakistan’s military and technological edge, which is likely to improve strategic relations with Gulf countries and potentially boost defence and tech exports,” he noted.
Ashraf also pointed to Pakistan’s improving economic fundamentals. April’s inflation hit a record low of 0.3% year-on-year, and March posted the highest-ever monthly current account surplus at $1.195 billion — both strong signals for sustained investor optimism.
Analysts now expect market focus to shift toward the upcoming federal budget, due on June 2, as policymakers look to sustain macroeconomic momentum.
