PSX skyrockets as tensions ease
In an electrifying turn of events, the Pakistan Stock Exchange (PSX) on Monday staged its highest single-day rally, driven by a host of positive developments, most significant of which included the surprise ceasefire with India and President Trump's offer to mediate in the Kashmir dispute. Additionally, Trump's encouragement towards increased trade and the IMF's approval of $2.4 billion in disbursements, with $1 billion coming from its Extended Fund Facility (EFF) and $1.4 billion from the Resilience and Sustainability Facility (RSF), played a key role in the unprecedented bull run.
Market momentum was further amplified by a surge in global equities and crude oil prices post-trade deal between the US and China as well as policy easing by the State Bank of Pakistan (SBP). There was widespread enthusiasm as investors engaged in a buying spree, triggering a halt to trading moments after the opening bell. The KSE-30 index surged over 5% for five straight minutes. The pause did little to cool investor sentiment and the KSE-100 index shot up to the intra-day high of 10,153 points, before cooling slightly to 10,123 points at 117,297.
Trading activity was robust, with 732.9 million shares traded during the day and a traded value of Rs30.4 billion.
According to Ahsan Mehanti of Arif Habib Corp, stocks made a historical surge, led by across-the-board activity, amid a surprise ceasefire between Pakistan and India and Trump's offer to work on a solution for the Kashmir dispute and increase trade substantially. A surge in global equities and crude oil prices after a US-China trade deal, alongside rupee stability amid the IMF board's approval of EFF and RSF disbursements, and SBP policy easing played the role of catalysts in bullish close at the PSX, added Mehanti.
At the end of trading, the benchmark KSE-100 index recorded an increase of 10,123.09 points, or 9.45%, and settled at 117,297.73. In its market review, Topline Securities commented "the bulls came stampeding into the Pakistan Stock Exchange today, torching the gloom with a historic 9.45% rally - the biggest single-day surge the KSE-100 has ever witnessed."
It remarked that the benchmark index rocketed to an intra-day high of 10,153 points, before cooling slightly to close at a blazing 117,297, soaring 10,123 points, as investor sentiment did a full 180-degree flipping from panic to power in just a few days. The rally was so intense that trading was temporarily halted just moments after the opening bell, as the KSE-30 index surged over 5% for five straight minutes, triggering the market's circuit breaker mechanism. The one-hour pause did little to cool investor enthusiasm; if anything, it added fuel to the fire, added the brokerage house.
After a week of market gloom driven by regional unrest, a surprise ceasefire breakthrough and a multibillion-dollar IMF assistance served as a cocktail of catalysts that sent the market soaring. With diplomacy soothing nerves and dollars flowing in, the PSX didn't just bounce; it roared back to life, kicking off the week with a blaze of renewed confidence, reported Topline. The largest surge on the benchmark index came from Fauji Fertiliser Company, UBL, Engro Holdings, Mari Petroleum and Lucky Cement, which collectively added 3,003 points to the KSE-100, it added. In its commentary, Arif Habib Limited (AHL) said that the PSX broke records, gaining 9.45% day-on-day, following Pakistan's ceasefire with India. Some 100 shares rose while 0 fell, with Fauji Fertiliser Company (+10%), UBL (+10%) and Engro Holdings (+10%) contributing the most to index gains, noted AHL.
The brokerage mentioned that there was a powerful convergence of positive developments that set the stage for the resurgence of the PSX. The ceasefire, alongside President Trump's recent statement pledging support for the resolution of the Kashmir issue as well as his encouragement for enhanced trade relations between India and Pakistan were the most significant catalysts. In addition to this, Pakistan has secured the IMF's approval for a $1 billion disbursement under its EFF programme and a $1.4 billion disbursement from the RSF, noted AHL. It added that Monday's gains keep the KSE-100 index in the 105,000-120,000 range, with focus now on the sustainability of the current move as it approaches the top of the range. Ali Najib, Head of Sales at Insight Securities, stated that as war clouds subsided, the PSX registered a record single-day gain of 10,000+ points, marking its highest-ever single- day close.
The day resumed on a jubilant note as the PSX welcomed the ceasefire between India and Pakistan announced over the weekend, which provided a sigh of relief to the investor community. In addition, the IMF's board of directors' approval of Pakistan's EFF on Friday night further fuelled investor enthusiasm, mentioned Najib.
Overall trading volumes increased to 732.9 million shares compared with Friday's tally of 516.3 million.
Shares of 462 companies were traded. Of these, 405 stocks closed higher, 26 fell and 31 remained unchanged.
K-Electric was the volume leader with trading in 114.5 million shares, gaining Rs0.55 to close at Rs4.56. It was followed by At-Tahur Limited with trading in 75.9 million shares, gaining Rs1.44 to close at Rs44.01 and WorldCall Telecom with 66 million shares, gaining Rs0.16 to close at Rs1.32. During the day, foreign investors bought shares worth Rs93.3 million, the National Clearing Company of Pakistan reported.