Winning Bizness Desk
Mumbai.
Pakistan’s stock market witnessed an unprecedented rally on April 8, as the benchmark KSE-100 index of the Karachi Stock Exchange soared by 14,162.58 points, or 9.34 percent, to close at 165,836.05. The surge follows the announcement of a two-week ceasefire between the United States and Iran, bringing temporary relief to global markets rattled by prolonged geopolitical tensions. This marks the largest single-day gain in the history of the KSE-100 index, triggering a temporary halt in trading as per market regulations.Ceasefire triggers sharp investor confidence rebound
The rally is being directly linked to the ceasefire agreement reached after nearly 40 days of conflict between the United States and Iran. The truce, reportedly facilitated through mediation by Pakistan and China, includes a halt to hostilities involving Israel and ensures safe passage of ships through the Strait of Hormuz under Iranian military oversight.
Key developments driving market sentiment include:
- Two-week halt in military conflict
- Assurances on maritime trade routes
- De-escalation of tensions in West Asia
- Reduced geopolitical risk premium
Earlier, the US President had issued strong warnings to Iran, including threats of severe retaliation if access through the Strait of Hormuz was blocked.
Market rebounds after historic early March crash
The latest surge comes weeks after a dramatic crash on March 2, when the KSE-100 index had plunged by 16,089 points, or nearly 9.57 percent, marking one of the worst declines in its history. That fall was attributed to escalating tensions in West Asia, which had spooked investors and triggered heavy sell-offs.
Though the index had shown marginal recovery on April 7, the broader trend remained volatile until the ceasefire announcement restored confidence.
Talks likely in Islamabad to follow truce
Reports indicate that the ceasefire is aimed at paving the way for formal negotiations, which could take place in Islamabad. Pakistan Prime Minister Shehbaz Sharif confirmed that the ceasefire would take immediate effect and expressed hope that discussions would lead to a long-term resolution.
Crude oil prices tumble sharply after agreement
Global crude oil prices saw a sharp correction following the ceasefire, dropping by around 15 percent. Prices fell by 15 dollars to 94.27 dollars per barrel on Wednesday, marking the steepest single-day fall in six years.
Price movement snapshot:
- Pre-war level (Feb 28): 73 dollars per barrel
- Peak during conflict: 120 dollars per barrel
- One day earlier: 109.27 dollars per barrel
- Current level: 94.27 dollars per barrel
- Fuel prices in Pakistan may see relief soon
The fall in crude oil prices is expected to ease fuel costs in Pakistan, where petrol and diesel prices had surged sharply in recent weeks. On April 3, petrol and diesel were raised significantly, triggering public backlash, after which petrol prices were reduced by 80 Pakistani rupees.
Current fuel price situation:
- Petrol: 378 Pakistani rupees per litre
- Diesel: 520.35 Pakistani rupees per litre
- Previous peak: Petrol crossed 458 rupees per litre
The government had earlier increased petrol prices by 43 percent and high-speed diesel by 55 percent due to rising global oil costs.
Global markets rally in response to easing tensions
The ceasefire announcement also lifted global equities. In India, the Sensex jumped 2,946 points to close at 77,563, while the Nifty rose 874 points to settle at 23,997, led by gains in auto, banking, and realty stocks.
Across Asia, markets showed strong gains:
- South Korea’s Kospi rose 6.87 percent
- Japan’s Nikkei climbed 5.39 percent
- Hong Kong’s Hang Seng gained 3.09 percent
- China’s Shanghai Composite advanced 2.69 percent
In contrast, US markets on April 7 showed mixed trends, with the Dow Jones slipping slightly, while Nasdaq and S&P 500 posted marginal gains, reflecting cautious optimism amid easing geopolitical risks.
