After a turbulent start to the trading session, the Pakistan Stock Exchange (PSX) staged a significant comeback on Monday, with the benchmark KSE-100 Index rebounding from a steep intra-day drop to close in positive territory. By 2:20 PM, the index had recovered all earlier losses and climbed 236.52 points, or 0.21%, reaching 114,350.45.
The day began with widespread selling pressure, as rising geopolitical tensions between Pakistan and India rattled investor confidence. The KSE-100 Index fell over 1,000 points early in the session, hitting a low of 113,077.66. Market sentiment took a sharp hit following media reports hinting at the possibility of Indian airstrikes. These fears were fueled by a significant 40-minute meeting on Sunday between Indian Prime Minister Narendra Modi and Air Chief Marshal VR Chaudhari, held in the aftermath of the recent Pahalgam attack in Jammu and Kashmir.
Despite the initial panic-driven selloff, investor sentiment gradually stabilized later in the day. Bargain hunting and a wave of optimism ahead of the State Bank of Pakistan’s Monetary Policy Committee (MPC) meeting helped drive a recovery across key sectors. Market participants are eagerly awaiting the MPC’s decision on the benchmark interest rate, scheduled for later in the day, with hopes that easing inflation could prompt a supportive monetary stance.
Last week, the PSX had already endured heightened volatility, with the KSE-100 Index shedding 1,355.41 points, or 1.2%, on a weekly basis. The index closed at 114,114 points on Friday, down from 115,469 points at the end of the previous week. Much of this decline was attributed to escalating regional tensions and uncertainty about Pakistan’s macroeconomic outlook.
Globally, Indian equity markets offered a more stable contrast on Monday, with the Nifty 50 gaining 0.59% to 24,487.14 and the BSE Sensex rising 0.54% to 80,936.4 as of 10:03 AM IST. These gains came despite similar geopolitical concerns, buoyed by easing global trade tensions and a notable drop in international crude oil prices. Additionally, steady foreign inflows continued to provide support to Indian equities. Foreign portfolio investors (FPI) extended their buying streak in Indian markets for a twelfth consecutive session on Friday, marking the longest such streak in two years.
Indian equities also logged their longest weekly winning streak of 2025 last Friday, driven by renewed optimism over a potential India–U.S. trade deal. However, analysts noted that gains remain capped due to lukewarm corporate earnings for the March quarter and the overarching geopolitical uncertainties in the region.
Back at home, the PSX’s recovery during Monday’s session highlights the resilience of domestic investors, despite external pressures. Analysts suggest that any further easing in geopolitical tensions or a dovish tone from the SBP could help sustain momentum in the local equity market. However, volatility is expected to persist in the near term, especially as investors digest macroeconomic signals and monitor cross-border developments.
The remainder of the week will likely hinge on the MPC’s rate decision and any further statements from regional governments that could either stoke or defuse tension. For now, the market’s recovery has offered a brief reprieve and a sign of cautious optimism.