KSE-100 bounces back. But fear still lurks

It's been a rollercoaster for Pakistan's stock market. After an eye-popping plunge of nearly 6,500 points on Thursday — one of the steepest in recent memory — the KSE-100 staged a comeback Friday morning, rising over 2,200 points and trading near 105,759.

This whiplash is classic Pakistan market drama — fast falls, sharp rebounds, and investors caught in between. While the green on the screen is a relief, the fear hasn't really left the building.

What sparked the chaos?

Two words: Operation Sindoor.

India's reported military action earlier this week sent shockwaves across the border. With fears of escalation running high, investors dumped stocks, and trading was temporarily halted on Thursday. The result? A market meltdown.

Overnight, tensions remained high, keeping the region — and markets — on edge. Still, the absence of a full-blown escalation by Friday morning gave some investors enough courage to step in and bargain hunt, pushing the index up by over 2%.

IMF card in play

Adding fuel to the rebound was the buzz around the IMF.

The Fund is meeting today to review Pakistan's performance under the Extended Fund Facility. If that happens, it could ease some pressure on Pakistan's finances — and bring temporary calm to the market.

That said, it's not a magic wand. The country still faces low reserves, currency stress, and shaky investor confidence. The IMF lifeline might help, but it won't fix everything.

What's working in the market

Friday's bounce was led by:

• Banks: Always among the first to benefit from economic stability hopes
  
• Cement and construction: Betting on a pickup in infrastructure spending
  
• Oil and gas: Rebounding with global cues and local demand support

Final word

Yes, the rebound is a relief. But don't get carried away.

Geopolitical tensions remain fluid, and the market could swing either way. If you're already invested, stay alert but avoid knee-jerk decisions. If you're thinking of entering, wait for confirmation, not just a single green day.

The next few sessions, especially after the IMF verdict, will reveal whether this bounce is the start of stability or just another head fake.

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Disclaimer: This story was created with the assistance of artificial intelligence and is intended for informational purposes only. Please take it with a pinch of salt and do your own research or consult a financial advisor before making investment decisions.