Pakistan Stock Exchange Sees Strong Recovery After Historic Drop
The Pakistan Stock Exchange (PSX) experienced a remarkable rebound on Friday, with the benchmark KSE-100 Index surging over 2,200 points during early trading hours. This followed a dramatic historic drop of nearly 6,500 points on Thursday.
At 9:40 AM, the KSE-100 Index reached 105,759.27, reflecting a 2.16% increase or 2,232.46 points. The recovery came as investor sentiment improved due to the absence of further escalation in regional tensions and growing optimism surrounding positive developments from the International Monetary Fund (IMF).
Market Rally Driven by Key Sectors
The market’s recovery was bolstered by buying activity across various key sectors, including automobile manufacturers, cement, commercial banks, oil and gas exploration companies, oil marketing firms, and power generation companies. Heavyweight stocks such as HUBCO, MARI, OGDC, PPL, POL, PSO, and SNGPL also saw positive movement, contributing to the index’s sharp rebound.
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Reassurance After Tensions
Market analysts attributed the rally to a mix of technical correction after Thursday’s steep fall and a sense of reassurance following the lack of new developments on the geopolitical front. The market had faced significant selling pressure on Thursday, triggered by escalating tensions between Pakistan and India and reports of drone attacks. However, on Friday, calm seemed to return as investor confidence was restored.
IMF Meeting Adds Positive Momentum
Investor focus also shifted towards the International Monetary Fund (IMF)’s scheduled meeting on Friday (May 9). The IMF Executive Board is set to review Pakistan’s progress under the $7 billion Extended Fund Facility (EFF) program. The board will discuss potential modifications to Pakistan’s performance criteria and consider a fresh $1.3 billion loan under the Resilience and Sustainability Facility (RSF).
If approved, Pakistan could receive around $1 billion (SDR 760 million) under the EFF, raising the total disbursements under the program to nearly $2 billion. Additionally, the $1.3 billion RSF loan, aimed at enhancing climate resilience, would be distributed over a 28-month period.
Thursday’s Market Dip
On Thursday, the KSE-100 suffered a massive plunge, closing at 103,526.82 points with a loss of 6,500 points, marking one of the steepest declines in recent market history. The fall was largely attributed to political uncertainty and security concerns stemming from ongoing tensions between Pakistan and India.
Global Markets Overview
On the global front, Japanese equities saw an uptick on Friday, buoyed by a surge in the US dollar against the yen. The rally was fueled by optimism surrounding a US-UK trade deal announced by President Donald Trump and UK Prime Minister Keir Starmer, marking the first formal agreement since Trump declared a 90-day tariff suspension for broader trade talks.
However, skepticism about the impact of the limited UK deal on the ongoing US-China trade talks dampened optimism. Asian markets followed suit, with Japan’s Nikkei and Topix indices climbing 1.2%, marking an 11-session winning streak—the longest since October 2017. Taiwan’s benchmark rose by 1%, while Australian stocks gained 0.4%. On the other hand, Hong Kong’s Hang Seng Index rose slightly by 0.2%, while mainland Chinese blue chips slipped by 0.2%
