Pakistan equities recover 57% of lost value in record rally

A record rally at the Pakistan Stock Exchange (PSX) on Tuesday saw the market recover almost 57% of the capitalization it lost during the past week.

Over the past six sessions, the index lost 11,921 points, with the market capitalization or value of shares suffering a decline of nearly PKR 1,284 billion. The cumulative value fell to PKR 18,376 billion or $64.5 billion, registering a fall of 6.5%

On Monday alone, the market fell by almost 3%.

Experts said the investors were wary due to skirmishes on the border with Afghanistan, the delay in getting the IMF’s nod for the new loan tranche, and the country’s law and order situation.

However, the tides at the PSX turned on Tuesday as the benchmark KSE-100 index went up by 7,032.60 points or 4.44% — the second-highest gain ever in a single session. The market closed at 165,476 points.

Earlier in May, the index recorded its largest increase in a single session — 10,123 points — after a ceasefire agreement was reached following military clashes with India.

On Tuesday, the index gained nearly PKR 729 billion.

The rally was led by heavyweight companies, Lucky Cement Limited (LUCK), United Bank Limited (UBL), Systems Limited (SYS), Engro Corporation Limited (ENGRO), The Hub Power Company Limited (HUBC), and Mari Energies Limited (MARI) led the rally, collectively contributing 2,645 points to the index.

The total traded volume clocked in at 1,176 million shares, and the traded value reached PKR 59 billion. The Bank of Punjab was the leader in terms of volume with 100 million shares traded.

An analyst from Topline Securities said after Monday's “bloodbath”, the bulls have staged a powerful comeback

The sharp rebound was driven by the improved law-and-order situation after nationwide protests by a religious political party were called off and the ceasefire prevailing over the border with Afghanistan.

Moreover, the positive remarks on Pakistan by U.S. President Donald Trump about Pakistan’s role in the Gaza ceasefire deal improved investors’ sentiment, reinforcing expectations of better geopolitical ties and renewed foreign interest, the analyst added.

The growing optimism for a staff-level agreement between Pakistan and the IMF after a meeting between the finance minister and the IMF managing director in Washington prompted broad-based buying across sectors such as automobile assemblers, cement, commercial banks, and oil & gas exploration companies, an analyst from Al Habib Capital Markets said.

Experts forecast the banks will perform better in the last quarter of 2025 as the economy is showing improved growth compared to the last fiscal year, and the credit off-take is expected to rise. This would help improve the sector’s earnings.