The KSE-100 Index opened around 1% higher and increased further beyond the 81,000 point level within the first hour of trading as investors cheered the staff-level agreement between Pakistan and the International Monetary Fund (IMF).
At 12:40pm, the KSE-100 was hovering around 81,412.37, a gain of 1,468.28 points or 1.84% with across-the-board buying activity.
The sentiment – which has persisted ever since the budget saw no new taxes on the capital markets – was given a boost over the weekend as the IMF announced a new 37-month, $7-billion bailout for Pakistan on Friday night.
The announcement, largely in line with market expectations, gives another helping hand to the faltering economy that had earlier received a $3-billion loan – labelled the Stand-By Arrangement – just last year.
The IMF programme is seen as a roadmap for Pakistan that struggles to control expenditure, and has to service a mountain of debt that eat away at its tax revenue.
Despite the struggling state of the economy, KSE-100 companies have announced impressive profits, and many analysts believe share prices are still trading lower than their actual potential despite the record rise during fiscal year 2023-24.
However, during the previous week, the PSX had remained under pressure as investors opted to book profit on available margins.
Globally on Monday, US bond futures slipped and the dollar firmed on Monday as investors wagered the attack on US presidential candidate Donald Trump made his victory more likely, while injecting a whole new level of political uncertainty into markets.
Investors have tended to react to the prospect of a Trump win by pushing Treasury yields higher, in part on the assumption his economic policies would add to inflation and debt.
Futures for 10-year Treasuries slipped 13 ticks, while cash bonds were untraded due to the Japanese holiday.
S&P 500 futures and Nasdaq futures were both marginally higher.
This is an intra-day update
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