KARACHI: After experiencing its largest single-day drop of over 3,500 points, the Pakistan Stock Exchange (PSX) made an impressive recovery, with the benchmark KSE-100 Index surging by nearly 4,700 points, marking the highest-ever single-day point gain. This dramatic rebound pushed the index past the 99,000 mark for the first time in history. The KSE-100 closed at 99,269.25, up 4,695.09 points or 4.96%, after reaching an intra-day peak of 99,549.81.

The resurgence in the market was driven by a sense of relief following the conclusion of the Pakistan Tehreek-e-Insaf (PTI) party’s three-day protest in Islamabad. PTI’s decision to end the demonstration came after a crackdown by law enforcement, which calmed investor fears of escalating political unrest. This positive shift in the political landscape helped restore confidence in the stock market. A broad-based rally lifted various sectors, with the banking industry leading the charge.

Key stocks in the banking sector, such as HBL, NBP, and MCB, posted strong gains, while other sectors like oil and gas exploration, automobile assemblers, power generation, and oil marketing companies (OMCs) also saw significant buying interest. The buying momentum continued towards the closing hours of trading, signaling that the market’s positive sentiment was likely to persist.

The recovery followed a sharp drop the previous day, when the KSE-100 had plunged by over 3,500 points amid fears of political instability, particularly after the Pakistan Army was called in to handle the PTI protest. However, the situation improved overnight, as law enforcement cleared key protest sites in the capital, including Blue Area and D-Chowk, leading to a resurgence of optimism in the market. In addition to the political developments, the State Bank of Pakistan (SBP) contributed to the upbeat mood by making a significant policy adjustment.

The central bank removed the Minimum Profit Rate (MPR) requirement for conventional banks on deposits from financial institutions and public sector enterprises, and also mandated Islamic banks to pay a higher yield on savings deposits, further encouraging positive market sentiment. Internationally, Asian stocks had a mixed performance, with concerns about potential tariffs under the incoming US administration putting pressure on global markets. The Pakistani rupee saw a slight depreciation against the US dollar, falling by 0.04%, closing at 277.96. In terms of trading volume, the all-share index saw a decline to 1.057 billion shares from 1.116 billion on Tuesday, with the total value of shares traded also dropping to Rs39.55 billion from Rs43.29 billion. Leading the trading volume were B.O. Punjab, Hascol Petrol, and K-Electric Ltd. Of the 453 companies that were traded, the majority-356-saw gains, while 52 companies posted declines.