Pakistan Stock Exchange (PSX) experienced a powerful upswing as easing geopolitical tensions between Pakistan and Afghanistan triggered a wave of investor optimism. The benchmark KSE-100 Index surged by over 2,400 points in a single session on Monday, signaling renewed confidence in the domestic equity market.
The index touched an intra-day high of 166,421.33 points before closing at 166,242.90, marking a gain of 2,436.69 points or 1.49 percent. This surge reflects how quickly sentiment can shift when major political and security developments occur, providing a tailwind for market performance.
The rally came shortly after the announcement of an immediate ceasefire between Pakistan and Afghanistan. The agreement followed high-level negotiations in Doha, Qatar, where both sides agreed to respect each other’s sovereignty and territorial integrity, as confirmed by Defence Minister Khawaja Muhammad Asif. A follow-up meeting has been scheduled for October 25 in Istanbul, Türkiye, where delegations from both countries are expected to discuss outstanding issues and finalize a monitoring framework for the ceasefire’s implementation.
This development comes as a significant relief to investors who had been cautious amid heightened border tensions and political uncertainty. Over the past week, the PSX had seen sharp intraday swings, with the index opening at 163,098.19 points and closing the week at 163,806.22 points, reflecting a modest weekly gain of 708.03 points or 0.4 percent. Analysts say the ceasefire news was a key trigger for Monday’s rally, which could set the tone for improved sentiment in the coming sessions.
The market also drew strength from Pakistan’s recent staff-level agreement with the International Monetary Fund (IMF), which helped stabilize the macroeconomic outlook. Traders and institutional investors welcomed these parallel developments, anticipating a more predictable policy environment and improved capital flows.
Global cues further reinforced the positive momentum. Asian stocks climbed on Monday, buoyed by a sharp rise in Nikkei 225 as Japan neared the appointment of a new prime minister. Investors were also encouraged by data suggesting that inflation in the United States is unlikely to derail anticipated rate cuts, supporting broader emerging market sentiment.
Data from China also played a role in bolstering regional confidence. The world’s second-largest economy grew by 1.1 percent in the third quarter, surpassing expectations, while industrial output jumped 6.5 percent. Although annual growth slowed to 4.8 percent, this figure signaled resilience in a challenging global environment. Chinese blue-chip shares gained 1.0 percent, while MSCI Asia-Pacific ex Japan Index rose 1.3 percent and South Korea’s main index added 1.0 percent.
Market analysts believe the combination of geopolitical de-escalation, supportive macroeconomic signals, and favorable global trends created a near-perfect environment for Monday’s rally. Many sectors, particularly banking, energy, and technology, saw strong buying interest, reflecting broad-based optimism.
Looking ahead, investors will closely watch the upcoming Pakistan-Afghanistan follow-up talks and global economic indicators. Sustained stability on the geopolitical front could further enhance risk appetite, while any new disruptions may trigger volatility. For now, the market’s response underscores how geopolitical breakthroughs can reshape financial sentiment almost instantly.
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