PSX surges 11% on Middle East ceasefire

The benchmark KSE-100 index of the Pakistan Stock Exchange (PSX) staged a powerful rebound during the outgoing week, surging over 11% on a week-on-week (WoW) basis to close at 167,191 points, as easing geopolitical tensions and improving macroeconomic signals triggered broad-based investor interest.

On a day-on-day basis, the PSX commenced the week with a volatile session but had a positive close at 151,208, up 809 points (+0.54%), thereby snapping its seven-week Monday losing streak, which had been driven by panic selling amid adverse geopolitical developments over successive weekends.

On Tuesday, the bourse witnessed a range-bound session with a positive finish as the KSE-100 index closed at 151,675, up 466 points (+0.31%). The market enjoyed a historic rally on Wednesday, with the index surging by 14,136 points (+9.32%) to close at 165,811, marking the largest-ever point gain in its history.

On Thursday, the PSX had a lacklustre day, losing 294 points (-0.18%) to end the session at 165,518. It closed the week on a positive note, recording gains of 1,674 points (+1.01%) to settle at 167,191.

Arif Habib Limited (AHL) noted that the KSE-100 index exhibited a stellar performance after starting the week on a cautious note amid geopolitical concerns. The rally was driven by a midweek ceasefire brokered by Pakistan, which led to a trading halt on Wednesday amid strong buying momentum. The index closed at 167,191 points, registering a WoW increase of 11.2% (+16,793 points). "A strong WoW return of 11.2% marks the highest return since May 16, 2025," it said.

The central government debt increased by 0.7% month-on-month (MoM) to Rs79.9 trillion (+9.4% year-on-year) as of Feb'26 compared with Rs73 trillion in Feb'25. Remittances increased by 8% YoY to $30.3 billion during 9MFY26. In March alone, the remittances from overseas Pakistanis decreased by 5% YoY to $3.8 billion compared to $4.1 billion during Mar'25. On a MoM basis, the inflows increased by 17%.

In other economic news, the secondary market yields on Pakistan Investment Bonds (PIBs) declined on a WoW basis, with the five-year tenor down by 3.85% and the three-year tenor declining by 3.44%. Gross inflows under the Roshan Digital Account (RDA) reached $12.426 billion as of Mar'26. Out of the total funds, $2.028 billion has been repatriated while $7.983 billion has been utilised locally. With this, the net repatriable liability remained at $2.415 billion.

Additionally, Pakistan successfully repaid its $1.3 billion Eurobond maturing on April 8, 2026, along with $126.125 million in coupon payments on other outstanding Eurobond issuances. International oil prices as of April 9 reflected a swift unwinding of the geopolitical risk premium, with Brent declining 12% WoW to $95.92 per barrel, West Texas Intermediate (WTI) falling 12.3% WoW to $97.87 and Arab Light easing 13.2% WoW to $97.01.

The foreign exchange reserves held by the State Bank rose by $18.6 million, or 0.11%, reaching $16.4 billion during the week ended April 3, 2026. The Sensitive Price Indicator (SPI) recorded an increase of 12.15% YoY and 1.93% WoW, AHL said.

Syed Danyal Hussain of JS Global noted that the KSE-100 index registered a sharp recovery during the outgoing week, rising 11.2% (16.8k points) to close at 167,191. The rally was driven by improving geopolitical sentiment after Pakistan brokered a temporary ceasefire between the United States and Iran, with further negotiations scheduled for Saturday in Islamabad.

Meanwhile, the Arab Light crude oil, a key variable, declined by 12% during the week to around $98 per barrel, driving a broad-based decline in Kibor across all tenors as easing global energy prices helped reduce high inflation risks.

On the external front, Pakistan successfully repaid a $1.43 billion Eurobond, comprising $1.3 billion in principal along with accrued interest. Additionally, the country decided to repay $2 billion in UAE deposits, along with 6% interest. Government sources indicated that an additional $1 billion UAE deposit maturing in July may also be included, taking the total potential outflow to $3.5 billion, Hussain said.