The Pakistan Stock Exchange (PSX) witnessed a strong bullish rally on Thursday, with the benchmark KSE-100 index gaining over 1,400 points. The upward momentum was driven by growing optimism around the ongoing review of Pakistan’s $7 billion programme with the International Monetary Fund (IMF).
The KSE-100 index rose by 989.51 points, or 0.88%, reaching 113,243.27 by 11:56 am. The rally strengthened further, with the index climbing 1,253.77 points (1.12%) to 113,507.53 by 12:35 pm. Eventually, the day ended with the index closing at 113,713.17, reflecting a gain of 1,459.41 points or 1.3% compared to the previous close of 112,253.76.
Yousuf M. Farooq, Research Director at Chase Securities, attributed this surge to media reports indicating that the IMF might agree to revise Pakistan’s tax collection target downward. The adjustment could bring the target below Rs12.5 trillion, compared to the original Rs12.9 trillion, as economic activity slows and revenue collection falls short.
Finance Minister Muhammad Aurangzeb also bolstered investor confidence by confirming that the first biannual review discussions with the IMF had begun, asserting that Pakistan was well-prepared for these talks.
Adding to the positive sentiment, lower global oil and coal prices led analysts to anticipate reduced inflation, which could also influence a more accommodative monetary policy.
Sana Tawfik, Head of Research at Arif Habib Limited, noted that market participants are anticipating a possible 50-basis-point cut in interest rates when the State Bank of Pakistan’s Monetary Policy Committee meets on March 10. Combined with declining international oil prices and increased local institutional buying, these factors contributed to the market’s positive performance.
Further supporting investor sentiment was a rare acknowledgment from former US President Donald Trump, who praised Pakistan’s role in capturing an individual responsible for the deaths of 13 US service members. This gesture eased some geopolitical uncertainty around Pakistan’s relations with the United States.
Awais Ashraf, Director Research at AKD Securities, highlighted that investors are also hopeful about unlocking additional climate financing alongside a successful IMF review.
This positive momentum follows a challenging session a day earlier when the market faced selling pressure due to mixed investor sentiment and global factors, including a downturn in Asian markets and falling crude oil prices amid fresh US tariffs on Canada, Mexico, and China. However, the finance minister’s assurance regarding Pakistan’s strong position for the IMF review helped restore confidence, setting the stage for Thursday’s rally.
Pakistan’s current IMF programme, agreed in July, aims to strengthen macroeconomic stability and lay the groundwork for sustainable, inclusive growth. A nine-member IMF delegation is currently in Pakistan to conduct the first review under this programme.
