In a dramatic turnaround, the Pakistan Stock Exchange (PSX) saw a record-breaking rally on Monday as signs emerged of cooling tensions between Pakistan and India.
The benchmark KSE-100 index skyrocketed nearly 10,000 points during intra-day trading, hitting a historic high of 117,104.11 — the biggest single-day gain in points ever recorded. The surge, which marked a more than 9% jump from the previous close of 107,174.63, triggered a temporary trading halt under market rules designed to curb excessive volatility.
The remarkable spike in investor confidence came on the heels of a surprise ceasefire agreement between the two nuclear-armed neighbours, sparking hope that the worst of the recent hostilities may be over.
By the time the market was suspended, over 60 million shares had changed hands, with total turnover crossing Rs4.37 billion, according to official PSX data.
The rally offered some much-needed relief after what had been an extremely volatile week on the trading floor. Just days earlier, the KSE-100 index had plunged more than 6,900 points, closing the week at 107,175 — a 6.1% drop driven largely by rising fears of a military standoff and uncertainty around economic policy.
Despite a small rebound on Friday, market sentiment had remained cautious, with geopolitical noise and the State Bank’s unclear policy direction keeping investors on edge. Earlier in the week, the market opened with a sharp drop of over 1,000 points and closed flat on Monday. Tuesday saw renewed selling pressure, shedding another 534 points after an initial burst of optimism over a 100-basis-point rate cut was quickly overshadowed by warnings from Moody’s and rising border tensions.
Wednesday brought even more panic, with the market tumbling over 6,500 points shortly after opening — a reflection of just how rattled investors had become. Although Friday’s partial recovery of 3,650 points helped limit some losses, the weekly close still reflected the underlying nervousness.
Sector-wise, the pressure was felt across the board. Banks led the decline with a loss of 1,637 points, followed by exploration and production (-905), cement (-738), technology (-508), and pharmaceuticals (-436). The only sector to register a modest gain was sugar, adding just 7 points.
In its end-of-week review, brokerage firm Arif Habib Limited (AHL) said the index remained in the red for most of the week, with fears of escalation dominating market sentiment.
Now, with the ceasefire in place and diplomacy seemingly back on track, investors are cautiously optimistic that the market may stabilize — provided the geopolitical situation continues to cool.