The Pakistan Stock Exchange (PSX) experienced a significant recovery on Friday, with the benchmark KSE-100 index climbing nearly 4,000 points after its largest drop the previous day. The drop had caused losses of Rs 820 billion for equity investors. By 4:31 pm, the index had recovered 3,647.82 points, or 3.52%, to stand at 107,174.63 from the previous close of 103,526.81.
Mohammed Sohail, chief executive of Topline Securities, commented, “After falling sharply by 6% yesterday, the stocks have recovered significantly. So far, no news of any major escalation that helped restore confidence.
Yousuf M. Farooq, director of research at Chase Securities, noted that stocks on the PSX remained volatile, initially opening higher as participants assessed that an all-out war with India was unlikely.
Some investors have begun accumulating stocks trading at highly attractive valuations following the sharp drawdown over the past week,” he said. Farooq explained that the previous day’s decline was driven mainly by individuals unwinding leveraged positions and redemptions from mutual funds. Such corrections and short-term volatility are a normal feature of equity markets,” he said, advising that only long-term investors participate in the market, maintain discipline during periods of uncertainty, and gradually build their portfolios over time.
PSX sees significant recovery
Sana Tawfik, head of research at Arif Habib Limited, highlighted investor optimism regarding the International Monetary Fund (IMF) meeting as a primary reason for the recovery. “Most likely, the Executive Board will approve the tranche today,” she said.
The IMF is set to approve the immediate disbursement of about $1 billion to Pakistan under the ongoing Extended Fund Facility and allow an additional arrangement for the $1.3 billion Resilience and Sustainability Facility (RSF). Awais Ashraf, director of research at AKD Securities, mentioned that the panic triggered by the previous day’s drone attacks from the Indian side is subsiding. “The Pakistan Armed Forces’ demonstrated ability to intercept the threats has reassured investors,” he added.
The market capital had lost Rs1.3 trillion in value in the previous three sessions, as jittery investors preferred to exit the market amid growing uncertainty about the economic outlook due to geopolitical tensions. The situation escalated into a military standoff after India hit three cities with missiles on Wednesday, resulting in over 31 civilian casualties. Pakistan’s armed forces responded by downing five Indian fighter planes.
Lt Gen Ahmed Sharif Chaudhry, Director General of ISPR, confirmed that Pakistani forces had neutralized 25 drones sent by India since the previous night and that four army personnel were injured after one drone managed to strike a military target partially. Market attention now remains focused on developments in Pakistan-India tensions and the outcome of the IMF meeting.
