KSE-100 Index Soars 9% After India-Pakistan Ceasefire Announcement; Trading Halted Briefly

Karachi, May 12, 2025 – The Pakistan Stock Exchange (PSX) witnessed a dramatic surge on Monday, as the KSE-100 Index soared by 9%, following a surprise announcement of a ceasefire agreement between India and Pakistan. The sharp rise in investor confidence led to such high volatility that trading was halted for one hour, as per PSX regulatory protocols.

This unexpected spike marked one of the biggest single-day gains in recent years, with the index climbing over 4,300 points to close at 52,700, reflecting immediate investor optimism over prospects of regional peace and economic stability.

The announcement of a mutually agreed ceasefire along the Line of Control (LoC) by both nations triggered a wave of buying across key sectors, especially in banking, energy, cement, and telecom. Analysts attributed the rally to anticipated improvements in cross-border trade, reduced geopolitical risk, and better economic forecasts amid a stable environment.

“The ceasefire declaration has acted as a massive confidence booster,” said Ahmed Bilal, Senior Market Analyst at JS Global. “Investors are now factoring in a lower risk premium, improved foreign inflows, and potential economic collaboration if peace sustains.”

PSX authorities triggered a market halt at approximately 10:45 AM after the benchmark index breached the upper volatility limit of 8%. Trading resumed an hour later, stabilizing with strong institutional support and foreign investor participation.

The positive sentiment was echoed by government officials and economic commentators, who called it a “new beginning” for regional trade and cooperation. Pakistan’s Finance Minister Muhammad Aurangzeb tweeted,

“The market’s reaction underscores how deeply peace and stability are tied to our economic progress. We welcome this new chapter.”

From the Indian side, no official economic statement was released immediately, but early reports indicate a similar boost in Indian market futures ahead of trading hours.

Market watchers warn, however, that sustained momentum will depend on the durability of the ceasefire and follow-up diplomatic engagement. “This is a peace rally for now, but long-term gains will hinge on structural progress in bilateral ties,” noted Madiha Khan, an economist at Arif Habib Limited.

Foreign investors and financial institutions are reportedly monitoring the situation closely, with renewed interest in Pakistani bonds and equities.

If the ceasefire holds, experts suggest it could unlock multi-billion-dollar cross-border trade opportunities and improve credit ratings for both countries in the long run.