PSX Rebounds Strongly As IMF Deal Hopes Lift Sentiment

Pakistan’s stock market staged a sharp recovery in Karachi as investors returned to equities after a weak previous session, with the benchmark KSE-100 index gaining 2,593 points and closing above the 168,000 level. The rebound reflected renewed confidence after heavy selling linked to political uncertainty, regional tension and concerns over investor sentiment.

The recovery was supported by expectations that talks with the visiting International Monetary Fund mission could conclude positively later this week. Market participants are watching the review closely because a successful outcome could clear the way for about $1.2 billion in financing under existing programme arrangements, helping strengthen confidence in Pakistan’s external account position.

The KSE-100 index closed at 168,460 after rising 1.56 percent during the session. The index moved between 165,652 and 168,626, showing that buyers remained active through the day after the earlier correction created room for selective accumulation at lower levels.

Buying interest was visible across several major sectors, including commercial banks, oil and gas exploration, cement, automobiles, oil marketing companies, refineries and power. Market heavyweights played a central role in the rebound, with leading banks, exploration companies and power sector names contributing significantly to the index’s gains.

Analysts said the recovery was helped by a combination of attractive valuations, hopes of progress in the funding review and some easing in international oil prices. Lower oil prices can reduce pressure on the import bill and inflation expectations, which makes the market more comfortable about near-term macroeconomic stability.

Trading activity also improved as volumes rose to 432.01 million shares, while total turnover value increased to Rs20.1 billion. The stronger turnover indicated that the rebound was not limited to a narrow set of stocks and that broader market participation returned after the previous day’s selling pressure.

The session also included updates from the energy and corporate sectors. Oil production was reported lower on a weekly basis, while gas output also declined due to reduced flows from selected fields. Separately, automobile-related activity showed mixed trends, with three-wheeler sales improving while four-wheeler sales remained weaker year-on-year.

The market’s next direction will depend on whether optimism around the funding review turns into a confirmed agreement and whether global oil prices remain under control. Investors are also expected to keep watching political developments, foreign flows and institutional buying because the market remains vulnerable to sudden shifts in sentiment.

For now, the sharp rebound has restored some confidence after recent volatility, but the recovery is not yet risk-free. Sustaining momentum above the 168,000 level and moving towards the 170,000 mark will require clearer signals on financing, stability in energy markets and a calmer domestic political environment.