The Pakistan Stock Exchange (PSX) saw a strong recovery on Friday, reversing the steep losses experienced earlier in the week, as investor confidence returned amid signs of easing regional tensions.
By midday, the benchmark KSE-100 index had surged by 3,150 points, or 2.83%, reaching 114,476.98—up from the previous close of 113,954.55. This rebound comes after the market plummeted by over 3,500 points on Wednesday.
Yousuf M. Farooq, Director of Research at Chase Securities, attributed the rally to news suggesting a de-escalation in tensions between India and Pakistan. “This has led to a recovery in sentiment,” he said.
Farooq added that investors are now watching key economic indicators, including inflation figures expected later today and the upcoming monetary policy decision on Monday. A policy rate cut of 50 to 100 basis points is anticipated. Attention is also focused on Pakistan’s IMF board review scheduled for May 9.
Awais Ashraf, Director of Research at AKD Securities, echoed this view, noting that the absence of any military action from India helped restore investor confidence. He said this has prompted buying interest in stocks benefiting from Pakistan’s improving economic outlook.
Recent diplomatic efforts have also played a role in calming markets. The United States has urged both India and Pakistan to de-escalate tensions and pursue a “responsible solution.” The U.S. State Department confirmed ongoing communications with both countries, and Secretary of State Marco Rubio held separate calls on Wednesday with Pakistan’s Prime Minister Shehbaz Sharif and Indian Foreign Minister Subrahmanyam Jaishankar.
