Pakistan Markets Set to Rally on Ceasefire and IMF Boost

The Pakistan Stock Exchange – PSX and the rupee (PKR) are expected to rebound sharply following a surprise ceasefire agreement with India and the International Monetary Fund’s decision to disburse $2.4 billion to Pakistan. This includes a $1 billion installment and a $1.4 billion climate resilience program, significantly boosting investor confidence.

The KSE-100 Index may see a strong rally—potentially rising up to 5%—as markets reopen, driven by easing geopolitical tensions and renewed optimism in the economy. The PKR, previously under pressure, is also expected to stabilize due to the incoming IMF inflows.

Adding to the positive sentiment, the State Bank of Pakistan (SBP)‘s unexpected interest rate cut last week is likely to support market momentum. However, geopolitical risks remain, as India has yet to fully endorse the ceasefire or restore cooperation under the Indus Water Treaty.

Meanwhile, in India, markets are closed Monday due to a public holiday. The Nifty 50 and rupee are expected to recover Tuesday after last week’s losses, as foreign investor confidence gradually returns.