The Pakistan Stock Exchange saw a rapid rise on Monday, the first trading session, after the country secured a much needed funding deal from the International Monetary Fund. The benchmark share index gained 5.9%, which is the biggest single-day jump in 15 years.

“As a result of our continuous hard work and correct policies, the signs of economic recovery have started to show,” Prime Minister Shehbaz Sharif was quoted as saying in a statement shared by the state broadcaster PTV News.

The KSE 100 index gained 2,446 points and closed at 43,899. According to the Refinitiv data, it was the biggest percentage gain since June 24, 2008, when the index rose 8.6 per cent.

The gains made by the index, lead to the upper lock limit being reached. Consequently, trading had to be temporarily halted. The temporary halt is placed whenever the market loses or gains over 5% of its volume and usually lasts an hour.

Many traders were hopeful that the positive momentum would continue in the stock market in the coming weeks.

Reports said that investors were especially buying index-heavy stocks such as auto assemblers, cement, chemical, commercial banks, oil and gas exploration companies and coil management companies.

This is also the market’s first day of action after the government signed a long-awaited deal with the IMF. The confidence gained by the market is encouraging brokers to sell, causing a rise in activity.

The deal is subject to the IMF board’s approval but still represents a major breakthrough in negotiations that had been stalled for months. PM Shehbaz and Finance Minister Ishaq Dar have claimed that the IMF deal has helped avert the risk of default for good.

Investors have welcomed the Pakistan-IMF deal as the index was seen at its highest level of 43,900 points during the trading. Except for two to three, all chips, also called strips, were seen green on the trading board as a result of the loan agreement.

“Historic DoD [Day on Day] gain witnessed at PSX today [Monday] with KSE100 increasing by 2,446 points and closing at a 14 months high,” said Arif Habib Limited tweeted.

The security brokerage firm described the development as “the best performance ever” on a DoD basis. It added that trading sessions KSE100 has increased by 9.57% in the last three trading sessions.

Average daily traded volume increased by 62% DoD to 381 million shares, which is the highest since October 6, 2022, the firm added.

Topline Securities, a brokerage house, described the event as ‘The Most Bullish Day’. It was the “highest ever gain (in points term) since the KSE100 index’s inception in Nov 1991.”

The Pakistani rupee gained Rs5 in the open market, closing at Rs286 against the US currency amid an inter-bank trading holiday due to the start of the new fiscal year.

But the country’s sovereign dollar-bonds rose as much as 1 cent on Monday.

Over the past few months, several automakers announced prolonged plant closures because of import restrictions.

Honda Atlas Cars (Pakistan) and Pakistan Suzuki shares rose 7.5% to hit the upper limits of trading bands, while Indus Motor Co, which markets Toyota cars in the country, gained 4.2%.

In a tweet Finance Minister Ishaq Dar shared some statistics, which included that “CPI inflation for June 2023 clocked in at 29.4% compared to 38% YoY for May 2023”.

Last time, Topline Securities CEO Mohammed Sohail said that the highest one-day increase in points was 1700 points seen on April 11, 2022

“After 7 minutes, market trading was halted as the index rose 5%. This was the first market halted due to a bull run after many months,” he tweeted.

He was of the view that an increase in shares signalled more gains in the stock market on Tuesday, especially at the opening.

(With input from Reuters)