IMF deal drives bullish rally at PSX, lifting investor confidence

• KSE-100 closes at 117,772.31, up 1,139.15 points, or 0.98%.
• Intraday high of 118,220.88, gained 1,189.22 points, or 1.36%.
• Intraday low of 117,178.23, up 545.07 points, or 0.47%.

The capital market witnessed a strong bullish rally on Wednesday, driven by the staff-level agreement between Pakistan and the International Monetary Fund (IMF) on the ongoing bailout package, along with a new $1.3 billion arrangement.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index gained 1,139.15 points, or 0.98%, to settle at 117,772.31 by session’s end.

The index touched an intraday high of 118,220.88 and a low of 117,178.23, reflecting a session driven by investor optimism following key economic developments.

“The IMF review is the major positive trigger,” said Sana Tawfik, Head of Research at Arif Habib Limited. “We’ve seen the market respond with a gain of over a thousand points. OGDC and PPL announcing the completion of the feasibility study on reko Diq, has also supported sentiment, but overall, it’s IMF-driven.”

The IMF announced that it had reached a staff-level agreement with Pakistan for the new 28-month Resilience and Sustainability Facility (RSF) arrangement and also completed the first review of the 37-month Extended Fund Facility (EFF).

The Fund acknowledged Pakistan’s progress in restoring macroeconomic stability despite global challenges and highlighted that the new arrangement would help address climate-related vulnerabilities. Upon executive board approval, Pakistan will receive an immediate $1 billion tranche, raising total disbursements to $2 billion.

The Reko Diq project added further momentum to energy and exploration stocks. OGDC announced the completion of an updated feasibility study, revealing a 37-year mine life and a $5.6 billion investment plan for Phase 1, which is expected to commence in 2028. Total estimated production includes 13.1 million tonnes of copper and 17.9 million ounces of gold.

Meanwhile, Pakistan’s economic data remains mixed. The Ministry of Finance forecasts CPI inflation to rise to 2–3% in April from 1–1.5% in March. Inflation was recorded at 1.5% YoY in February, down sharply from 23.1% in February 2024.

The oil sector continues to struggle under the weight of a sales tax exemption introduced in the 2024 Finance Act. Industry estimates project combined losses of Rs35 billion, with refineries and oil marketing companies hit by their inability to claim input tax. 

The new petroleum minister has yet to engage with industry players, and concerns persist over delays in refinery upgrade agreements with Ogra.

On Tuesday, the PSX had already hinted at positive sentiment, with the KSE-100 closing up 193.55 points, or 0.17%, to 116,633.17 points, up from 116,439.62 points recorded in the last session. The highest index of the day remained at 116,904.55 points, while the lowest level was recorded at 115,877.88 points.