Equities continued their upward trajectory on Monday, fueled by investor optimism surrounding a ceasefire agreement with Afghanistan and the confirmation of a staff-level accord with the International Monetary Fund (IMF) for the next loan installment.
The benchmark KSE-100 Index of the Pakistan Stock Exchange (PSX) climbed to an intraday high of 165,348.04 points. This represented a gain of 1,541.83 points, or 0.94 percent, from the previous session’s close of 163,806.21 points. During the session, the index also recorded a low of 164,281.95 points, still up by 475.74 points, or 0.29 percent.
“Bullish activity was observed following reports of a cross-border ceasefire with Afghanistan and the staff-level agreement with the IMF for the release of the next tranche,” stated Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities. He added that rising global equity markets and speculation during the ongoing corporate results season further catalyzed the positive trend at the PSX.
The market’s confidence was bolstered after Defence Minister Khawaja Muhammad Asif confirmed that Pakistan and Afghanistan had agreed to an immediate ceasefire during talks in Doha. Both sides are scheduled to hold further discussions in Istanbul on October 25. This diplomatic breakthrough followed a week of severe border clashes, the most intense since the Taliban’s return to power in 2021.
Market sentiment received an additional boost from the IMF’s staff-level approval for the second review under the Extended Fund Facility (EFF) and the first review under the Resilience and Sustainability Facility (RSF). The Fund projected Pakistan’s GDP growth at 3.6 percent and inflation at 6 percent for the fiscal year 2026. Other factors contributing to the sustained inflow into equities included declining fixed-income yields, an improved credit outlook, and a scarcity of alternative investment options.
In other developments, Pakistan inked a 5-billion-yuan memorandum of understanding with China to tackle its water crisis. On the domestic debt front, the government raised Rs507 billion through Pakistan Investment Bonds (PIBs) and Rs776 billion via Treasury bills, with PIB yields rising by 13 to 21 basis points.
Externally, the State Bank of Pakistan’s (SBP) foreign exchange reserves saw a weekly increase of $21 million, reaching $14.4 billion. The Pakistani rupee also strengthened marginally by 0.03 percent, closing at 281.1 against the US dollar.
In the previous trading session on Friday, the KSE-100 Index had closed down 638.50 points, or 0.39 percent, at 163,806.22 points, after fluctuating between a high of 165,030.82 and a low of 163,118.01. Despite this loss, the index posted a net weekly gain of 708 points, or 0.4 percent.
