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Stock Market IndexRebounds after Major Drop; Attention Shifts Towards IMF Board Meeting and Investors' Interest

Stocks rise in absence of significant conflict news involving Pakistan and India.

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Markets surged with no sign of intensified conflict between Pakistan and India.
Markets surged with no sign of intensified conflict between Pakistan and India.

Stock Market IndexRebounds after Major Drop; Attention Shifts Towards IMF Board Meeting and Investors' Interest

In a major development, the stock market in Pakistan bounced back after a massive 6,500-point plunge on Thursday, with the KSE-100 Index recovering by over 3.5% on Friday. This rebound was primarily due to optimism surrounding the upcoming International Monetary Fund (IMF) Executive Board meeting scheduled for May 9, 2025. The meeting will consider Pakistan's Extended Fund Facility (EFF) programme and a request for modification of performance criteria, as well as a request for an arrangement under the Resilience and Sustainability Facility (RSF).

Investors are hopeful that the meeting will see smooth approval of a staff-level agreement reached in March 2025. The approval would immediately result in a disbursement of about $1 billion to Pakistan under its ongoing $7 billion bailout program. Additionally, the Board is expected to approve a new $1.3 billion loan arrangement under the RSF. This loan aims to help Pakistan build resilience to natural disasters, improve climate adaptation, enhance water use efficiency, and strengthen climate risk disclosure and energy sector reforms aligned with mitigation targets.

However, the Board meeting is taking place amid geopolitical tensions, with India expressing skepticism about the effectiveness of past IMF bailout programs for Pakistan. India’s Foreign Secretary Vikram Misri has urged the IMF Board to scrutinize Pakistan’s situation deeply before approving new disbursements, noting that Pakistan has had 24 IMF bailout packages over the last three decades with few successful outcomes.

Bullish momentum was observed during the first half of trading, pushing the KSE-100 Index to an intra-day high of 107,541.45. At close, the benchmark index settled at 107,174.64, up by 3,647.82 points or 3.52%. The recovery was largely due to optimism surrounding the IMF meeting and the decline in cross-border hostilities.

Topline Securities, a brokerage house, said in its post-market report that the top positive contributors to the index were LUCK, MARI, HUBC, HBL, FFC, PPL, OGDC, ENGROH, EFERT, and PSO, collectively contributing 1,923 points.

This rebound comes after a weekly decline of 7.2% for the KSE-100 Index, which was largely due to escalating tensions between Pakistan and India. During the week, individuals and mutual funds (on redemption) sold heavily, but their selling was largely absorbed by local institutions, including banks, companies, other organizations, and the insurance sector.

Despite the positive movement on Friday, concerns about the limited trade agreement with London may cool optimism around the outcome of Sino-U.S. trade talks set for Saturday in Switzerland. Meanwhile, the Pakistani rupee continued to depreciate against the US dollar, settling at 281.71 on Friday, a loss of Re0.19 against the greenback.

  1. The rebound in the KSE-100 Index was due, in part, to optimism surrounding the upcoming IMF Executive Board meeting, which will discuss Pakistan's Extended Fund Facility and a request for modification of performance criteria.
  2. If the staff-level agreement reached in March is approved, Pakistan will receive about $1 billion under its ongoing bailout program.
  3. The IMF Board is also expected to approve a new $1.3 billion loan arrangement under the Resilience and Sustainability Facility.
  4. Geopolitical tensions with India exists, as their Foreign Secretary has expressed skepticism about the effectiveness of past IMF bailout programs for Pakistan and urged thorough scrutiny.
  5. During the first half of trading, bullish momentum pushed the KSE-100 Index to an intra-day high of 107,541.45 points, with the index's recovery largely due to optimism surrounding the IMF meeting and the decline in hostilities.
  6. Topline Securities reported that the top positive contributors to the index during trading were LUCK, MARI, HUBC, HBL, FFC, PPL, OGDC, ENGROH, EFERT, and PSO, collectively contributing over 1,900 points.
  7. Despite the positive movement on Friday, concerns about the limited trade agreement with London may cool optimism around the outcome of Sino-U.S. trade talks set for Saturday in Switzerland.
  8. Despite the index's rebound, the Pakistani rupee continued to depreciate against the US dollar, settling at 281.71 on Friday.

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