As the Indian stock market today breathed a sigh of relief after a huge surge in India VIX and Friday’s fall. The Stock Market of Pakistan is also showing relief as the Index surged by over 9.30 percent or 9,976 points in today’s trade, halting the trading from 10:07 AM to 11:12 AM (PKT). India’s Nifty 50 Index also surged by 3.45 percent or 831 points.
Key Reasons for the 9% Surge
Primary reason for the Stock market of Pakistan surgin by over 9 percent is the IMF (International Monetary Fund) finishing the first review of Pakistan’s economic reform plans, as a result of which, Pakistan will immediately get $1 billion in financial support, which takes the total financial support to $2.1 billion. Additionally, the IMF has also approved a new loan of about $1.4 billion under the new Resilience and Sustainability Facility (RSF) that will be disbursed in some later stages.
Furthermore, the other 2 reasons are the India & Pakistan Ceasefire agreement that took place, just hours after major shelling was taking place between the two countries. The other reason for Pakistan’s Stock market shooting up could be the trade deal announcement between the US and China.
Compared to the market capitalization of around $5 trillion for India’s stock market, the Pakistan Stock Exchange (PSX) stands at a modest $68 billion — even smaller than the market cap of Infosys, which alone is valued at $73 billion.
The KSE-100 Index, Pakistan’s benchmark index, has a total market capitalization of just $39.7 billion, which is actually less than the market cap of India’s Ultratech Cement that has a market capitalization of $40.73 Billion, Even NTPC limited with a market capitalization of $39.91 Billion is bigger than the whole KSE 100 Index.
Pakistan’s GDP currently stands at $342 billion, whereas India’s GDP is significantly larger at $4.19 trillion. The contrast becomes even more striking when you look at the market capitalization of India’s top corporations. Reliance Industries, with a market cap of $229 billion, and HDFC Bank, valued at $170.85 billion, together boast a combined market capitalization of approximately $408 billion, which is substantially higher than Pakistan’s entire GDP.
Written By Abhishek Das
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