The Pakistan Stock Exchange (PSX) witnessed a dramatic turnaround on Friday as the benchmark KSE-100 Index surged 3,647.82 points (3.52%) to close at 107,174.64, marking a strong recovery after Thursday’s historic 6,482-point (5.89%) plunge – the worst single-day decline in recent history. This remarkable rebound came amid easing geopolitical tensions between Pakistan and India following diplomatic intervention by the United States, coupled with growing optimism about the IMF’s impending approval of a $1.1 billion loan tranche under its Extended Fund Facility (EFF) program.
Market analysts attributed the bullish sentiment to multiple factors, including the expected approval of Pakistan’s first review under the 7billionEFFprogramandapotentialadditional1.3 billion under the Resilience and Sustainability Facility (RSF). The positive momentum was further supported by April’s remittance figures showing a 13.1% year-on-year increase to 3.2billion,withsignificantinflowsfromSaudiArabia(725.4 million), UAE (657.6million),UK(535.3 million), and USA ($302.4 million).
Sector-wise, the recovery was led by heavyweight stocks in energy, cement and banking sectors. Lucky Cement (+6.74%), Mari Petroleum (+6.21%), and Hub Power (+5.69%) emerged as top contributors, collectively adding 1,923 points to the index. The oil and gas sector particularly benefited from rising global crude prices, with the Oil & Gas Index closing 5.39% higher. Other notable sectoral performances included cement (+5.20%), banking (+2.72%), and power generation (+3.71%).
The trading session witnessed extreme volatility, with the index initially gaining 2,400 points before retreating 1,106 points, only to rally again by 4,015 points intraday. Despite the bullish close, trading volumes declined 21% to 516.3 million shares compared to the previous session’s 653.6 million, while the total traded value fell 18.6% to Rs28.8 billion from Rs35.4 billion. Foreign investors showed cautious optimism, buying shares worth Rs638.6 million according to NCCPL data.
Market experts noted that while the recovery was impressive, it only partially offset the 13% decline recorded since April 22 following escalating tensions with India. Historical data suggests such market shocks are typically short-lived, with past conflicts like the 2019 Balakot airstrike showing similar patterns of initial decline followed by recovery. Analysts from Arif Habib Limited (AHL) projected the KSE-100 could trade between 100,000-115,000 points in the coming week, depending on geopolitical developments and the IMF’s final decision.
Other positive indicators included the State Bank of Pakistan’s reserves increasing by 118millionto10.33 billion as of May 2, while commercial banks held $5.15 billion in foreign reserves. The federal budget for fiscal year 2025-26 is scheduled to be presented on June 2, which market participants will watch closely for policy direction.
Individual stock performances varied widely, with PIA Holding Company Limited and Nestle Pakistan emerging as top gainers, adding Rs703.20 and Rs120.31 respectively. On the downside, Unilever Pakistan Foods and Supernet Technologies were among major losers. WorldCall Telecom led the volume chart with 47.1 million shares traded, followed by Cnergyico PK with 33.6 million shares.
The broader market indices also showed positive momentum, with the BRIndex100 gaining 3.79% to close at 11,267.56 points and BRIndex30 rising 4.89% to 32,236.02 points. Market capitalization increased by Rs368 billion to reach Rs12.893 trillion, with 300 out of 441 traded stocks closing in positive territory. Analysts cautioned that while the recovery was encouraging, sustained stability would depend on continued geopolitical calm and successful completion of the IMF program review.
Also read: PSX surges over 900 points amid India-Pakistan border tension
