The Pakistan Stock Exchange (PSX) is experiencing a strong bullish trend, with the KSE 100 index showcasing significant gains, primarily driven by the easing of geopolitical tensions between Pakistan and India following a ceasefire agreement.

On Monday, May 12, 2025, the KSE 100 index surged, marking its third consecutive day of gains. The index has seen a substantial increase, driven by improved investor sentiment following the ceasefire announcement between Pakistan and India. This positive momentum has helped to alleviate concerns about further conflict escalation.

The KSE 100 index has recorded its largest single-day increase in index points, surging by 9,928 points during intra-day trading to reach 117,104.11 points. According to Bloomberg data, the KSE 100 index jumped nearly 9100 points, or 8.9%, to 116,640.94. This surge builds on the strong gains seen in the previous trading session, with the index already up nearly 4% on Friday. With these recent gains, the Pakistan benchmark index has turned positive on a year-to-date (YTD) basis.

The surge in the KSE 100 index triggered a temporary suspension of trading on Monday, in accordance with stock market regulations designed to manage extreme fluctuations. The trading halt was initiated after the KSE-30 index recorded a 5% increase from the previous day's closing figures. The suspension affected all equity and equity-based market operations. Trading was halted for an hour.

Market analysts attribute the rally to the improved investor sentiment following the ceasefire announcement. According to PSX data, the market recorded over 60 million shares in volume, with a turnover exceeding Rs4.37 billion by the time of the suspension.

The KSE 100 index's strong performance is a welcome change after a turbulent period. The index had previously experienced a 3.4% decline in May and a 5.5% drop in April. These declines were primarily due to heightened tensions between India and Pakistan, particularly after the terrorist incident targeting tourists in Pahalgam, Kashmir, on April 22.

Besides the positive impact of the ceasefire, the International Monetary Fund's (IMF) approval of crucial funding has further boosted the market. The KSE-100 Index gained 10,123 points, the highest-ever gain, on Monday. The index kicked off trading with a bang, jumping to an intra-day high of 117,104.11, an increase of 9,929.48 points or 9.26%.

Indian stock markets also reflected this positive sentiment, recording sharp gains. The BSE Sensex jumped over 2300 points, reaching a day's high of 81,830, while its NSE counterpart, the Nifty 50, hit the 24,738 level, gaining over 700 points.

However, market experts have cautioned that the current positive market sentiment could be adversely affected if ceasefire breaches occur. Sustained foreign investment is also crucial for maintaining this bullish trend.

Overall, the KSE 100 index's recent performance reflects the positive impact of the India-Pakistan ceasefire on investor confidence. The market has shown remarkable resilience, and analysts are optimistic about its potential for further gains, contingent on continued peace and stable economic factors.