PSX surges nearly 10,000 points on India-Pakistan ceasefire, IMF approval
The Pakistan Stock Exchange (PSX) staged a strong comeback on Monday, driven by a 'convergence of positive developments' including a ceasefire agreement between India and Pakistan, as well as the International Monetary Fund's (IMF) approval of crucial funding. The benchmark KSE-100 Index surged nearly 10,000 points during the opening hours of trading.
At 9:30am, the benchmark index was hovering at 117,104.11 level, an increase of 9,929.48 points or 9.26%.
'As expected, the Pakistani stock market rallied at the open with the KSE 100 index opening up at a record 9,900 or 9.3%. Sentiments are extremely positive after the ceasefire and approval of the loan tranche by the IMF at the weekend,' said Mohammed Sohail, CEO of Topline Securities, in a note.
Following a 9% jump, market operations were halted temporarily. 'This upside market halt has happened after two years,' said Sohail.
'A powerful convergence of positive developments has set the stage for a potential resurgence in the PSX, with Monday's session expected to open on a markedly bullish note,' said Arif Habib Limited (AHL) in its report on Monday.
The brokerage house anticipates the KSE-100 index to post a strong rally, potentially gaining 6 – 7%, while believing many stocks will close to the upper limit of 10% as investor sentiment flips from fear to opportunity.
'The most significant catalyst is the ceasefire agreement between India and Pakistan — a major diplomatic achievement that sharply lowers geopolitical risk in the region. The announcement comes after weeks of tension following the Pahalgam attack, which had triggered aggressive selloffs and fueled widespread investor concerns.
'Adding further momentum is the US President's recent statement pledging support for resolving the Kashmir issue and encouraging enhanced trade relations between India and Pakistan,' read the report.
'Together, the ceasefire, IMF support, monetary easing, and the positive shift in trade relations with the US form a powerful trifecta of bullish triggers just as the market attempts to recover from its recent sharp correction that began on April 22, 2025, following the Pahalgam attack and subsequent regional tensions,' read the report.
AHL noted that since April 22nd, 2025, the KSE-100 index has declined by 12.6%.
During the previous week, the PSX closed in the red, as mounting geopolitical tensions between Pakistan and India weighed heavily on investor sentiment.
Persistent uncertainty surrounding regional stability prompted widespread caution, dragging market performance down throughout the trading week except Friday, in which the market showed strong recovery.
The benchmark KSE-100 Index shed 6,939 points, or 6.1%, on a week-on-week basis, closing at 107,175 points compared to 114,114 points in the previous week.
Internationally, Wall Street stock futures climbed and the dollar firmed against safe haven peers on Monday as signs of progress in US-China trade talks boosted hopes a global recession might be avoided, though details of any deal were still to come.
Geopolitical tensions also looked to be easing as a fragile ceasefire held between India and Pakistan, while Ukrainian President Volodymyr Zelenskiyy said he was ready to meet Vladimir Putin in Turkey on Thursday for talks.
Over in Geneva, US Treasury Secretary Scott Bessent touted 'substantial progress' in trade discussions, while Chinese officials said the sides had reached 'important consensus' and agreed to launch another new economic dialogue forum.
A joint statement is expected later on Monday, though it was notable that neither side mentioned tariff rates specifically.
Markets reacted by pushing S&P 500 futures up 1.2%, while Nasdaq futures rose 1.4%. EUROSTOXX 50 futures firmed 0.9%, while FTSE futures added 0.4% and DAX futures 0.7%.
Japan's Nikkei edged up 0.3%, while South Korea gained 0.4%.
This is an intra-day update
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
2 hours ago
- Business Recorder
Budget FY2025-26: Pakistan govt proposes ‘Carbon Levy' on petrol, diesel
Pakistan government imposed a new tax on the sale of petrol, diesel and furnace oil namely 'Carbon Levy' at Rs2.5 per litre to be collected in upcoming fiscal year 2025-26 that will be raised to Rs5 per litre in the financial year 2026-27, according to budget documents on Tuesday. The new tax will be collected apparently with effect from July 1, 2025 in addition to the existing expensive petroleum development levy (PDL) at Rs78 per litre on petrol and Rs77 per litre on diesel, making the petroleum products further costlier. Budget 2025-26: Pakistan targets 4.2% growth as Aurangzeb presents proposals 'for a competitive economy' While announcing the budget for 23025-26, Finance Minister Muhammad Aurangzeb also announced to collect Petroleum Levy on the sale of furnace oil (FO) at the rate to be notified by Federal Government from time to time. While speaking at the National Assembly's floor, Aurangzeb said that the Carbon Levy was being imposed to discourage more use of fossil fuel and to mobilise resources for climate change and green energy programmes. Topline Securities commented 'in line with commitment to IMF, the government has imposed PDL on furnace oil; however, the rate is not disclosed yet'. Recent reports suggest the government would also surge PDL on the petroleum products to Rs100 per litre in the upcoming fiscal year (FY26) in line with s new agreements with International Monetary Fund (IMF) under the ongoing 37-month long $7 billion Extended Fund Facility (EFF). Key highlights of Pakistan budget for 2025-26 To recall, the diesel is being sold at Rs254.64 per litre and petrol at Rs253.63 per litre in Pakistan with effect from June 1. 2025. The government revises the petroleum products prices twice a month in line with global oil pricing trends.
Business Recorder
2 hours ago
- Business Recorder
Budget 2025-26: auto sector faces mixed fortunes amid tariff reforms, carbon tax
Pakistan's auto sector navigated a complex landscape following the announcement of the federal budget for 2025-26, as Finance Minister Muhammad Aurangzeb unveiled a raft of tariff reforms aimed at aligning with global trade norms and International Monetary Fund (IMF) recommendations. While the government touts these reforms as steps toward export-led growth and trade liberalisation, industry stakeholders are voicing concerns about the adverse impact on local manufacturing. Under the new budget, Additional Customs Duty (ACD) and Regulatory Duty (RD) are set to be reduced to zero by 2030. The fifth schedule will be eliminated, and Customs Duty (CD) will be capped at 15%. Budget 2025-26: Pakistan targets 4.2% growth as Aurangzeb presents proposals 'for a competitive economy' It will be reduced to zero percent by 2030. These changes, according to the government, are part of a long-term National Tariff Programme aimed at boosting exports and ensuring smoother access to global supply chains. However, domestic players fear the reforms could weaken Pakistan's already fragile local manufacturing base. 'The new carbon tax will increase vehicle prices, while reduced RD on imported cars will make them cheaper — making imports more attractive and local manufacturing less competitive,' a senior official from a local car manufacturing company said. Meanwhile, Mashood Khan, an auto sector expert, warned that the reforms reflect IMF directives rather than domestic industrial priorities. 'The downward trend in ACD, RD, and CD will likely hit local manufacturing instead of boosting exports. Without a thriving domestic industry, our import bill will rise and foreign reserves will suffer,' he said, urging the finance minister to revisit the policy before parliamentary approval. Khan added that auto parts and related industries would face significant challenges without a clear strategy to support industrialization. 'It's unclear how exports will grow without strengthening the local base,' he noted. Offering a more optimistic view, Shafiq Ahmed Shaikh, an automobile consultant and former Pak Suzuki official, welcomed the overhaul. 'This is a good move. A gradual reduction in duties will help Pakistan integrate with global markets and secure better FTAs and PTAs,' he said. He noted that duties could fall from 20% to 15% over the next five years and emphasised that aligning tariffs with international norms would bring policy stability and encourage export-oriented investments. However, Shaikh cautioned that the removal of the 12.5% concessional sales tax on vehicles under 850cc would hurt lower- and middle-income consumers. The standard 18% sales tax will apply, increasing prices of small hatchbacks. Pak Suzuki, which leads the market in this segment due to its Alto 660cc, will be most affected. Aurangzeb defended the move, arguing that automakers were not passing on the tax benefit to consumers, making the concession ineffective. Key highlights of Pakistan budget for 2025-26 Osama Naeem, an auto analyst at AKD Securities, said, 'RD on vehicles above 3,000cc will be slashed from 90% to 50%, but details for lower engine sizes are awaited. This reduction in RD will hurt local assemblers who face competition from cheaper imports.' He further said the ACD cut would impact imported completely built units (CBUs) more than local manufacturers, as the latter apply it primarily on parts and raw materials.
Business Recorder
6 hours ago
- Business Recorder
Rupee registers marginal decrease against US dollar
The Pakistani rupee registered marginal decline against the US dollar, depreciating 0.01% during trading on Tuesday. At close, the local currency settled at 282.21, a loss of Re0.04 against the greenback. On Thursday, the rupee settled at Rs282.17 against the US dollar. The currency market was closed from Friday to Monday on account of Eid holidays. Internationally, the US dollar firmed on Tuesday as Washington and Beijing remained locked in trade talks that left investors on edge and hesitant in placing major bets while looking ahead to the US inflation report later in the week. Top officials from the world's two largest economies sought to defuse a bitter dispute that has widened from tariffs to restrictions over rare earths, with trade talks extending to a second day in London. The talks come after US President Donald Trump and his Chinese counterpart Xi Jinping spoke by phone last week and at a crucial time for both economies, which are showing signs of strain from Trump's cascade of tariff orders since January. The lack of firm details despite positive sentiment from some officials and Trump meant the currency moves were mostly tepid. The euro eased 0.17% to $1.14 and sterling was at $1.3543. The US dollar index, which measures the US currency against six key rivals, was 0.2% higher at 99.189, but remained near six-week lows it touched last week. The index is down 8.7% this year as investors, worried about the impact of tariffs and trade tensions on the US economy and growth, flee US assets and look for alternatives. Oil prices, a key indicator of currency parity, edged up 1% to a seven-week high on Tuesday on hopes trade talks between the U.S. and China - the world's two biggest economies - will result in a deal that could support global economic growth and boost oil demand. Brent crude futures rose 81 cents, or 1.2%, to $67.85 a barrel by 11:22 a.m. EDT (1522 GMT), while U.S. West Texas Intermediate crude rose 83 cents, or 1.3%, to $66.12. Those gains pushed both crude benchmarks into technically overbought territory for the first time since early April and put Brent on track for its highest close since April 17 and WTI on track for its highest close since April 3. U.S. Commerce Secretary Howard Lutnick said trade talks with China were going well as the two sides met for a second day in London, seeking a breakthrough on export controls that have threatened a fresh rupture between the superpowers. Inter-bank market rates for dollar on Tuesday BID Rs 282.21 OFFER Rs 282.40 Open-market movement In the open market, the PKR lost 19 paise for buying and remained unchanged for selling against USD, closing at 282.53 and 284.40, respectively. Against Euro, the PKR gained 26 paise for buying and 79 paise for selling, closing at 320.69 and 323.88, respectively. Against UAE Dirham, the PKR lost 8 paise for buying and 3 paise for selling, closing at 76.72 and 77.48, respectively. Against Saudi Riyal, the PKR lost 20 paise for buying and 14 paise for selling, closing at 75.00 and 75.75, respectively. Open-market rates for dollar on Tuesday BID Rs 282.53 OFFER Rs 284.40
