KARACHI: The Pakistan Stock Exchange (PSX) rallied on Monday, with the benchmark KSE-100 Index climbing 1,541.83 points, or 0.94%, to reach an intraday high of 165,348.04, as investor sentiment was buoyed by two major developments: a ceasefire agreement between Pakistan and Afghanistan, and a staff-level agreement with the International Monetary Fund (IMF).
The index opened strong and posted gains throughout the session, reaching a low of 164,281.95 points, still up 475.74 points, or 0.29%, from the previous close of 163,806.21.
“Bullish activity was driven by optimism around the ceasefire and the IMF deal, alongside global equity momentum and earnings season speculation,” said Ahsan Mehanti, MD & CEO of Arif Habib Commodities.
Key Drivers Behind the Market Rally
🔹 Ceasefire with Afghanistan
Investor confidence received a boost following confirmation of a mutual ceasefire between Pakistan and Afghanistan after intense border clashes. Defence Minister Khawaja Asif announced that both nations would reconvene on October 25 in Istanbul for further dialogue.
🔹 IMF Staff-Level Agreement
The IMF confirmed a staff-level agreement for the second review under the Extended Fund Facility (EFF) and the first under the Resilience and Sustainability Facility (RSF). The deal paves the way for the release of the next funding tranche.
The IMF projects GDP growth at 3.6% and inflation at 6% for FY2026 — numbers seen as encouraging by market participants.
Additional Market Catalysts
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Improved Credit Ratings & Lower Fixed-Income Yields: These factors have made equities more attractive compared to other investment options.
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RMB 5 Billion Water MoU with China: Pakistan signed a memorandum of understanding with China to tackle its water crisis, signalling stronger bilateral ties and development cooperation.
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Strong Government Fundraising:
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Rs507 billion raised via Pakistan Investment Bonds (PIBs)
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Rs776 billion via T-bills
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PIB yields rose by 13–21 basis points, showing strong demand.
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Foreign Reserves & Currency Stability:
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SBP reserves rose by $21 million to $14.4 billion
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Pakistani rupee appreciated 0.03%, closing at 281.1 against the USD
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Weekly Performance Overview
Despite a 638.50-point drop on Friday, the KSE-100 Index still closed the week up by 708 points or 0.4%, reflecting overall market strength and resilience amid geopolitical and economic developments.
