The Pakistan Stock Exchange (PSX) witnessed a strong recovery on Tuesday, with the KSE-100 index surging by over 800 points. The positive momentum was driven by investor optimism following the IMF’s announcement of a $1.3 billion funding tranche for Pakistan, overshadowing recent geopolitical tensions with India.
Bulls Regain Control at PSX as IMF News Boosts Investor Confidence
The Pakistan Stock Exchange (PSX) staged a remarkable comeback on Tuesday, with the benchmark KSE-100 index climbing by 808.28 points — a rise of 0.71% — closing at 114,872.18, up from the previous day’s close of 114,063.90. This rebound followed a highly volatile trading session marred by geopolitical concerns and macroeconomic uncertainty.
According to Awais Ashraf, Director of Research at AKD Securities, the bullish momentum was largely fueled by the International Monetary Fund’s (IMF) announcement regarding its Executive Board meeting scheduled for May 9. During this meeting, the Board is expected to approve the disbursement of a $1.3 billion tranche to Pakistan under the Extended Fund Facility (EFF), alongside discussions on a new 28-month arrangement under the Resilience and Sustainability Facility (RSF).
The IMF confirmed that the review will cover the staff-level agreement for a new climate-focused loan facility, as well as the first review of Pakistan’s ongoing $7 billion bailout programme. The anticipated approval is being seen as a strong vote of confidence in Pakistan’s economic reform efforts.
Ashraf noted that the IMF-related developments shifted market sentiment significantly, redirecting focus from the rising border tensions with India to the country's macroeconomic stabilization initiatives.
The rebound came a day after sharp market losses, which were attributed to investor anxiety over escalating geopolitical tensions. Monday's session was marked by panic selling triggered by India’s suspension of the Indus Water Treaty (IWT) and Pakistan’s retaliatory threats, including the suspension of the Simla Agreement and potential airspace closure for Indian flights.
These moves followed the April 22 attack in Pahalgam, which claimed 26 lives, mostly tourists, in what has been described as the most lethal armed assault in the Kashmir region since 2000. The incident intensified hostility between the two nuclear-armed neighbors, casting a shadow over regional stability.
Topline Securities Ltd described the recent market behavior as a classic tug-of-war between bulls and bears. On Monday, the index had initially gained up to 1,189 points during early trading, only to reverse course sharply later in the session, ultimately closing 1,405.45 points down — a 1.22% drop.
However, Tuesday’s performance suggested renewed investor confidence, driven by the prospect of critical financial support from the IMF, potentially strengthening Pakistan’s economic outlook in the near term.
Share -
