Karachi, May 17, 2025 – The Pakistan Stock Exchange (PSX) ended the week on a strong note as the benchmark KSE-100 index surged by 11.64% week-on-week, driven by a landmark ceasefire agreement between Pakistan and India and the successful disbursement of the second tranche under the International Monetary Fund’s (IMF) Extended Fund Facility (EFF) program.
According to a report by Topline Securities Limited, the KSE-100 index witnessed a significant rally following two key developments. First, a diplomatic breakthrough was achieved as Pakistan and India agreed to a formal ceasefire after months of heightened tensions. The agreement, brokered with the mediation of the United States, was widely welcomed by global stakeholders and investors. Second, the IMF completed its first review of the EFF program and disbursed a crucial $1 billion tranche, boosting confidence in Pakistan’s economic stability.
Market analysts noted that the KSE-100 rally reflected improved investor sentiment due to reduced geopolitical risks and renewed commitment from the IMF. The ceasefire has significantly lowered the threat of regional instability, while the IMF tranche reinforced Pakistan’s ability to meet its external financing needs.
During the week, several other macroeconomic indicators also supported bullish momentum. Car sales in April 2025 reached 10,596 units, showing a 1% increase year-on-year despite a 5% monthly drop due to logistical challenges. Moreover, the latest T-bill auction saw robust participation of Rs1,988 billion, with the government raising Rs664 billion and yields falling by 66–90 basis points — a sign of improved liquidity.
Pakistan’s current account also remained in surplus for April 2025, adding $12 million and bringing the 10-month surplus to $1.88 billion, a stark contrast to the $1.33 billion deficit in the same period last year. Additionally, foreign direct investment (FDI) saw a notable uptick, reaching $141 million in April compared to $26 million in March.
The KSE-100 index also benefitted from increased investor participation. Average daily traded volume rose to 659 million shares, while the average daily traded value stood at PKR 38.6 billion.
The ceasefire and the IMF tranche have not only calmed investor nerves but also provided a much-needed push to Pakistan’s capital markets. As long as the ceasefire holds and economic reforms continue under IMF guidance, analysts expect the KSE-100 index to maintain its upward trajectory in the coming weeks.