KARACHI – The Pakistan Stock Exchange (PSX) rebounded sharply on Friday, gaining over 3,500 points, as investor confidence improved ahead of an IMF Executive Board meeting and signs of de-escalation in India-Pakistan tensions.
The benchmark KSE-100 index recovered 3,647.82 points (3.52%), closing at 107,541.45, following a historic 6,482-point plunge the previous day due to fears of escalating conflict between the two nuclear-armed neighbors.
Market analysts attributed the recovery to optimism surrounding the IMF’s Extended Fund Facility (EFF) program, which is expected to receive smooth approval. The $7 billion loan program, secured by Pakistan last year, aims to stabilize the economy through structural reforms and fiscal consolidation.
Investor sentiment also improved as cross-border hostilities showed signs of easing. The crisis had triggered a 12% market decline between April 23 and May 8, following India’s missile strikes on Pakistan in response to an attack in Indian-administered Kashmir.
Experts believe that institutional value buying and high-dividend blue-chip stocks contributed to the market’s rebound. Analysts suggest that further de-escalation in geopolitical tensions could sustain the positive trend.
This development underscores the critical role of geopolitical stability and IMF support in shaping Pakistan’s economic outlook.
