Pakistan Stock Market Soars, Then Pauses for Breath
Karachi Stock Exchange Takes a Break After Big Jump
The Karachi Stock Exchange in Pakistan took an unexpected pause on Monday, May 12, halting trading for a full hour after the market surged by a whopping 9%. The index closed the day at 1,16,650. This dramatic climb follows a turbulent week for the Pakistani market, which saw a 6% drop last week amid escalating tensions between India and Pakistan.
What Drove the Surge?
The sudden rebound can be attributed to several factors. First, India and Pakistan agreed to stop all military actions from 5 PM on Saturday, May 10, offering a ray of hope for peace. Second, the International Monetary Fund (IMF) gave Pakistan a much-needed boost by approving two financing decisions, releasing around $2.4 billion to support the country’s economic reforms and climate resilience programs.
Tensions Still High, But Markets Breathe a Sigh of Relief
Last week saw heightened anxieties as India conducted Operation Sindoor, targeting terrorist camps in Pakistan. This operation, in response to a recent terror attack in Kashmir, hit nine terror-linked sites in Pakistan and Pakistan-occupied Kashmir. These actions significantly escalated cross-border tensions. However, the de-escalation agreement and IMF financing seem to have calmed investors for now. Despite the positive news, the DGMOs of India and Pakistan are scheduled to meet at 12 pm on Monday, May 12, to continue discussions and hopefully maintain the fragile peace.
