PSX upbeat on ceasefire confirmation, IMF staff-level agreement

Bulls kept control at the bourse on Monday, with sentiment lifted by the Pakistan–Afghanistan ceasefire and confirmation of a staff-level accord with the International Monetary Fund (IMF) to unlock the next disbursement.

“Bullish activity was witnessed amid reports of a ceasefire in cross-border conflict with Afghanistan and the IMF staff-level deal for the release of the IMF tranche," said Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities.

"Surging global equities and speculation during the earnings season played a catalyst role in bullish activity at PSX,” he added.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index closed at 166,242.9 points, up 2,436.69 points, or 1.49%, from the previous close of 163,806.21 points.

During the session, the index surged to an intraday high of 166,421.33 points, gaining 2,615.12 points, or 1.6%, from the previous close of 163,806.21 points, and registered a low of 164,281.95 points, up 475.74 points, or 0.29%.

Investor confidence strengthened after Pakistan and Afghanistan agreed to an immediate ceasefire during talks in Doha, confirmed by Defence Minister Khawaja Muhammad Asif, who said both sides would reconvene in Istanbul on October 25 for further discussions. The breakthrough came after a week of intense border clashes — the worst since the Taliban takeover in 2021.

Market optimism was further buoyed by the IMF’s staff-level agreement for the second review of the Extended Fund Facility (EFF) and the first under the Resilience and Sustainability Facility (RSF), with the lender projecting GDP growth at 3.6% and inflation at 6% for FY26. Falling fixed-income yields, improved credit ratings, and limited alternative investment avenues also encouraged continued inflows into equities.

Pakistan also signed a RMB 5 billion memorandum of understanding with China to address the water crisis, while the government raised Rs507 billion through Pakistan Investment Bonds (PIBs) and Rs776 billion via T-bills, with PIB yields increasing by 13–21 basis points.

On the external front, the State Bank of Pakistan’s (SBP) foreign exchange reserves improved by $21 million week-on-week to $14.4 billion, while the rupee appreciated marginally by 0.03%, closing at 281.1 against the US dollar.

On Friday, the KSE-100 Index closed down 638.50 points, or 0.39%, at 163,806.22 points, after hitting a high of 165,030.82 and a low of 163,118.01. For the week, the index still gained 708 points, or 0.4%.