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ISLAMABAD: Pakistan’s benchmark share index jumped over 7,000 points on Tuesday, with analysts attributing the spike to easing geopolitical and domestic tensions, which lifted investor sentiment.

The KSE-100 index surged by 7,032.60 points, or 4.44 percent, to close at 165,476.02, compared to the previous close of 158,443.42.

Sana Tawfik, the Head of Research at Arif Habib Limited, said the index surged past the 165,000 level, marking one of the largest point gains in the history of the index.

“The rally was fueled by easing geopolitical and domestic political tensions, coupled with renewed investor interest as the results season commenced,” she told Arab News over the phone.

The Pakistan Stock Exchange (PSX) fell sharply on Monday as cross-border hostilities between Pakistan and Afghanistan prompted broad-based selling across key sectors.

The two neighbors exchanged heavy cross-border fire over the weekend, leaving 23 Pakistani soldiers and over 200 Afghan Taliban fighters dead, according to the Pakistan military.

The country also witnessed clashes between the government and a religio-political party striving to march on Islamabad in the last few days before their movement was halted on the outskirts of eastern Lahore.

Meanwhile, Ahsan Mehanti, Chief Executive Officer of Arif Habib Commodities, said stocks showed a strong recovery as investors welcomed improving Pakistan-US relations, progress on the Gaza ceasefire deal and easing tensions with Afghanistan.

“Renewed hopes for a positive Pakistan-International Monetary Fund and World Bank review meeting for the release of an IMF tranche next month played a catalytic role in record bullish activity at the PSX,” he said.

Pakistan’s Finance Minister Muhammad Aurangzeb arrived in Washington on Sunday to attend the IMF and World Bank annual meetings and hold talks on investment, taxation and economic reforms.

WASHINGTON: Pakistan is poised to sign a preliminary deal on a review of its loan program with the International Monetary Fund this week, the country’s finance minister said, a key step required to pave the way for another $1.24 billion payout from the lender.

An IMF mission left Pakistan last week without signing a so-called staff level agreement (SLA) on the second review of the Washington-based lender’s $7 billion Extended Fund Facility and the first one on its $1.4 billion Resilience and Sustainability Facility agreed in 2024 to shore up the economy after a severe financial crisis.

“The mission was on the ground for a couple of weeks, we had very constructive dialogue with them around the quantitative benchmarks, the structural benchmarks and we’ve been having some follow-up discussions,” Muhammad Aurangzeb told Reuters during an interview on the sidelines of the IMF World Bank annual meeting.

“During the course of this week, we’re hoping that we can get the SLA done.”

Countries under IMF lending programs need to pass regular reviews, which — once signed off by the Fund’s executive board, trigger a payment of the next tranche of IMF funding.

The IMF program agreed in September 2024 helped shore up then-cash-strapped Pakistan’s $370 billion economy that was engulfed in an economic crisis with inflation spiraling to record highs, a rapidly depreciating currency and a bulging external deficit.

Aurangzeb expected the government would launch a green Panda bond — the first one denominated in Chinese yuan for Pakistan — before year-end and return to international markets next year with a bond sale of at least $1 billion, though details were still to be decided.

“Euro, dollar, Sukuk, Islam Sukuk — we’re keeping our options open,” he said.

Meanwhile, the privatization push — part of a long-delayed sale of state assets under an economic reform and fiscal stabilization agenda — was expected to gain traction in the fiscal year to end-June after disappointing results last year.

“This is something which is very important as part of our economic roadmap,” he said.

Pakistan was also making progress on the sale of three power distribution companies and national carrier Pakistan International Airlines (PIA).

“We are quite hopeful,” Aurangzeb said, citing prospects for qualified bidders for PIA after lucrative routes to Europe and Britain were opened, which made it “a very good proposition for the investors.”

The transaction would mark the country’s first major privatization in about two decades. A previous attempt collapsed last year after a single lowball offer was received, but the government has since drawn interest from five domestic business groups including Airblue, Lucky Cement, investment firm Arif Habib and military-backed Fauji Fertilizer.

Final bids are expected later this year.