The Pakistan Stock Market witnessed a dramatic rebound on Monday, May 12, as the Karachi Stock Exchange surged by up to 9 per cent. This prompted a one-hour trading halt. This sharp rally came after a tense week of losses with the index having dropped 6 per cent amid rising tensions with India. The sudden turnaround followed a surprise ceasefire agreement over the weekend.
The Pakistan Stock Exchange (PSX) temporarily halted trading after the KSE-30 index jumped over 5 per cent from the previous session’s close — a level that automatically triggers a pause under PSX rules. The market cheer wasn’t limited to Karachi — Indian investors also breathed a sigh of relief. Stocks on Dalal Street surged in early trade, with the BSE Sensex climbing 2,298 points to 81,752.88 by 11:51 AM, and the NSE Nifty50 rising 714 points to 24,721.30.
Monday’s market rally followed two major developments. India and Pakistan agreed to stop all military action starting 5 PM on Saturday, May 10 and the International Monetary Fund (IMF) cleared two funding approvals for Pakistan. This released about 2.4 billion dollars to support its economic reforms and climate resilience efforts.
The Pakistan Stock Exchange has seen sharp swings over the past week, following India’s Operation Sindoor. This targeted terrorist camps across the border.
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