KARACHI; Bulls maintained a firm grip on the Pakistan Stock Exchange (PSX) on Monday as market sentiment received a strong boost from the Pakistan–Afghanistan ceasefire and confirmation of a staff-level agreement with the International Monetary Fund (IMF) to unlock the next loan tranche.
“The bullish trend was driven by reports of a ceasefire in the cross-border conflict with Afghanistan and the IMF staff-level deal for the release of funds,” said Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities. He added that a rally in global equities and speculation during the earnings season further fuelled the momentum at PSX.
The benchmark KSE-100 Index surged by 2,436.69 points, or 1.49%, to close at 166,242.90 points, compared to the previous close of 163,806.21. During intraday trading, the index reached a high of 166,421.33 points, up 2,615.12 points (1.6%), and recorded a low of 164,281.95 points, up 475.74 points (0.29%).
Investor confidence strengthened after Pakistan and Afghanistan agreed to an immediate ceasefire during talks in Doha. Defence Minister Khawaja Muhammad Asif confirmed that both sides would hold further negotiations in Istanbul on October 25. The development followed a week of intense border clashes, the worst since the Taliban’s 2021 takeover.
Market optimism was further reinforced by the IMF’s staff-level agreement on the second review of the Extended Fund Facility (EFF) and the first under the Resilience and Sustainability Facility (RSF). The IMF projects GDP growth at 3.6% and inflation at 6% for FY26. Lower fixed-income yields, improved credit ratings, and a lack of alternative investment options contributed to strong equity inflows.
Additionally, Pakistan signed an RMB 5 billion memorandum of understanding with China to tackle the water crisis. The government also raised Rs507 billion through Pakistan Investment Bonds (PIBs) and Rs776 billion via T-bills, with PIB yields rising by 13–21 basis points.
On the external front, the State Bank of Pakistan’s (SBP) foreign exchange reserves increased by $21 million week-on-week to $14.4 billion, while the rupee appreciated slightly by 0.03%, closing at 281.1 against the US dollar.
The positive session followed Friday’s decline, when the KSE-100 fell 638.50 points (0.39%) to 163,806.22. Despite the dip, the index gained 708 points (0.4%) over the week.
