PSX posts record rise after ceasefire with India

Pakistan Stock Exchange (PSX) witnessed a historic day on May 12, 2025 with benchmark KSE 100 index rising by 9.45% in a single day, highest rise after 26 years.

As per Bloomberg, KSE-100 index is the 3rd best performing market in last 12 months in the world.

Market capitalization rose to RKR14 trillion (US$49.8 billion), from RKR12.9 trillion (US$45.8 billion) an increase of 8.7%DoD.

According to Topline Securities, the unwavering optimism was led by immediate/ surprise ceasefire announced between Pakistan and India with mediation from United States on Saturday, May 10, 2025.

Along with this, approval of the first review of EFF program by IMF, unlocking US$1 billion tranche also boosted investors’ confidence.

Amidst Indo Pak turmoil starting from April 22, 2025 incident in Pahalgam, Kashmir, and the market had lost 12.5% in subsequent 12 sessions before recovering 3.5% on May 09, 2025.

The geopolitical tensions also clouded various positive developments of Pakistan market and economy including all time low inflation reading at 0.3%YoY, for April 2025 scheduling of Pakistan’s first review of EFF on IMF board meeting agenda for May 09, 2025 and a surprise cut of 100bps in policy rate to 11% by central bank of Pakistan.

Trading at PSX was halted within 5 mints of its opening, after the benchmark Index opened 9.26% positive. Based on exchange rule, trading is halted for an hour, if the benchmark index moves 5% in either direction and remains in that territory for five consecutive mints.

PSX witnessed trading value of PKR30.4 billion in ready market, up 5.3% higher than previous day.

Surprisingly, at the upper circuit, investor bids totaled PKR13 billion in both ready and future market, with the majority of interest seen in PPL, MLCF and PSO.

According to the brokerage house, local individual investors who had been net sellers in the recent past were aggressive buyers during the session directly and through local mutual funds.

Pakistan’s dollar denominated bonds maturing in 2025 and 2026 increased by 1.2% and 2.0%, respectively.

Similarly, yields on the 2025 and 2026 bonds have decreased to 9.93% and 10.19%, down from 13.27% and 12.56% on Friday.

Local bonds also posted a positive trend, with the 3-year bond yield falling by 8bps, while the 5-year yield also declined by 15bps.

According to annual strategy released in November 2024, Topline Securities had mentioned, approval of first review of IMF in March 2025 would be a key trigger in re-rating of market multiple to historic average.

The brokerage house maintains its base case Index Target of 127,000 for December 2025. However, with higher liquidity, index can cross 150,000 mark assuming successful IMF reviews and political/ geopolitical stability.

Gaza people dying of thirst

The Palestinian Water Authority (PWA) on Saturday warned of an imminent humanitarian catastrophe in the Gaza Strip, declaring that water and sanitation systems have nearly collapsed amid Israel’s ongoing offensive, reports Saudi Gazette.

The authority described the besieged enclave as “a region dying of thirst,” accusing Israel of committing a “grave and systematic war crime by using thirst and starvation as tools of genocide.”

According to the PWA, water extraction in Gaza has declined by 70 to 80 percent since the war began. “Current water consumption has dropped to an alarming 3–5 liters per person per day—far below the World Health Organization’s emergency minimum of 15 liters,” it said.

An Interim Rapid Damage and Needs Assessment (IRDNA) found that 85% of Gaza’s water and sanitation facilities have suffered severe damage. The PWA added that power outages, fuel shortages, and military restrictions have paralyzed efforts to restore critical infrastructure.

“Wastewater systems are non-functional, resulting in the discharge of untreated sewage into residential areas and overflowing storm water basins—posing grave public health threats,” it stated.

With access to clean water dwindling, many Gazans are resorting to brackish agricultural wells, which the authority warned is leading to widespread exposure to waterborne diseases.

The PWA urged the international community to act immediately to stop what it called “a deliberate and systematic campaign to exterminate the civilian population of Gaza through thirst, hunger, and disease.”

Pedro Arrojo-Agudo, the UN special rapporteur on the human rights to safe drinking water and sanitation, told Anadolu Agency earlier this week that cutting off water to civilians is akin to “dropping a terrible silent bomb on them... silent but lethal.”

Citing UNICEF data, Arrojo-Agudo noted that cases of diarrhea among children under five in Gaza surged from 40,000 to more than 70,000 in a single week in early December.

Israel resumed its military campaign in Gaza on March 18, breaking a ceasefire and prisoner exchange agreement reached on January 19. Since the war began in October 2023, more than 52,800 Palestinians — mostly women and children — have been killed, according to health authorities in Gaza.

The International Criminal Court issued arrest warrants last November for Israeli Prime Minister Benjamin Netanyahu and former Defense Minister Yoav Gallant for alleged war crimes and crimes against humanity. Israel also faces a genocide case at the International Court of Justice.

Iran and Saudi Arabia review bilateral relations

According to media reports, Iranian Foreign Minister Abbas Araghchi arrived in Jeddah on Saturday, marking a new chapter in the ongoing rapprochement between the two countries.

During his visit, Araghchi met with his Saudi counterpart, Foreign Minister Faisal bin Farhan, for talks focused on bilateral relations, regional dynamics, and broader international developments.

The meeting, held in the Saudi port city of Jeddah, comes as both countries continue to build on the momentum of restored diplomatic ties.

According to official sources, the two foreign ministers reviewed the current state of Iran Saudi relations and reaffirmed their shared commitment to advancing the vision set by their respective leaders for broadening cooperation across political, economic, and cultural fields.

Araghchi emphasized the critical need for unity within the Islamic world in facing shared threats and challenges particularly in relation to the situation in occupied Palestine.

He called on Muslim countries to act decisively to stop Israeli campaign of genocide and to counter efforts aimed at the colonial erasure of Palestine.

In addition to regional concerns, Araghchi used the meeting as an opportunity to brief his Saudi counterpart on the status of ongoing indirect negotiations between Iran and the United States.

These talks, mediated by Oman, are aimed at reaching a mutual understanding over Iran s nuclear program and the lifting of sanctions on Tehran.

Speaking in an interview ahead of his trip, Araghchi said the visit to Saudi Arabia formed part of broader consultations between Iran and regional actors concerning both regional security and the Iran-US dialogue.

He stressed that Iran has maintained consistent communication with its neighbors since the talks began in April to ensure transparency and regional alignment.

The sustainability of any potential agreement depends largely on the regional countries  considerations regarding the nuclear issue and their shared interests with the Islamic Republic, Araghchi stated.

Iran and the United States have thus far conducted three rounds of indirect negotiations in Muscat and Rome in April.

Both sides have described the talks as constructive and progressing, though a fourth round scheduled for May 03 in Muscat was postponed due to what was reported as lo gistical and technical reasons.

On Tuesday, Foreign Ministry spokesperson Esmaeil Baghaei said that Iran remains committed to diplomacy as a tool to achieve its lawful and legitimate national interests, especially the lifting of unlawful economic sanctions that have targeted the human rights and welfare of every single Iranian.

Following his visit to Saudi Arabia, the Iranian foreign minister travelled to Doha on Saturday afternoon to participate in the Iran Arab World Dialogue Summit, where further discussions on regional cooperation and diplomacy are expected to take place.

 

Trump’s Saudi visit and changing regional power dynamics

US President Donald Trump begins his second term with a symbolic return to Saudi Arabia, echoing his 2017 debut. His visit comes amid heightened regional tensions: the Gaza conflict, stalled Iran nuclear talks, and evolving alliances. Trump's hallmark approach—transactional diplomacy and personal ties with authoritarian leaders—aims to reposition US influence in West Asia.

Coinciding with the Gulf Cooperation Council (GCC) summit in Riyadh on May 14, the trip gathers Persian Gulf Arab leaders and the US president to discuss regional security, economic cooperation, and key geopolitical challenges.

Saudi Crown Prince Mohammed bin Salman (MBS) sees the summit as an opportunity to bolster US ties while managing sensitive issues like the Israel-Palestine conflict and potential normalization with Israel.

A pivotal topic is a potential US-Saudi civil nuclear deal. Unlike past administrations, Trump reportedly dropped the requirement for Saudi-Israeli normalization before advancing nuclear talks.

This shift signals a pragmatic decoupling of nuclear cooperation from the Palestinian issue, aligning more closely with Saudi interests.

However, the move has alarmed Israel. Officials fear a nuclear-capable Saudi Arabia could destabilize the regional balance, particularly if Riyadh pursues uranium enrichment.

With insufficient Senate backing to block the deal, the Netanyahu government is wary of being sidelined, as the US seems poised to proceed despite objections.

This policy recalibration reflects Trump's broader strategy: strengthening ties with Riyadh while accepting friction with Israel. It may reshape the region’s power dynamics, compelling Israel to reassess its security posture.

Trump aims to expand the Abraham Accords, pushing for broader Arab-Israeli normalization. Yet, ongoing Gaza violence and accusations of Israeli genocide—echoed by MBS—have revived demands for Palestinian statehood as a precondition.

Choosing Saudi Arabia as his first post-reelection stop underscores the region’s centrality to US strategy. The trip aims to reset partnerships, advance nuclear and defense deals, and navigate the complex Israeli-Palestinian landscape.

More than a diplomatic visit, it marks a strategic shift with lasting implications for West Asia's security, politics, and economics.

 

 

 

 

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President Donald Trump is embarking on his first international trip of his second term, returning to Saudi Arabia—a symbolic echo of his 2017 debut on the world stage. The visit, however, unfolded against a backdrop of heightened regional tensions, including the ongoing Gaza conflict, the uphill Iran nuclear negotiations, and shifting alliances. 

Trump's approach, characterized by transactional diplomacy and personal rapport with authoritarian leaders, aimed to recalibrate U.S. influence in West Asia.

Trump's visit coincides with a major (Persian)Gulf Cooperation Council (GCC) summit in Riyadh on May 14, bringing together Persian Gulf Arab leaders and the United States to address pressing regional issues. The summit serves as a platform for discussing security, economic cooperation, and the ongoing challenges facing the region.

Saudi Arabia's leadership, particularly Crown Prince Mohammed bin Salman (MBS), views the summit as an opportunity to strengthen ties with the U.S. while cautiously navigating contentious topics such as the Israel-Palestine conflict and normalization with Israel.

 US nuclear strategy in West Asia 

The potential U.S.-Saudi civil nuclear deal emerging from President Trump's visit represents a major strategic development with far-reaching implications for regional security and U.S. influence in West Asia. Unlike previous U.S. administrations, the Trump administration has reportedly dropped the longstanding U.S. condition that Saudi Arabia must normalize relations with Israel before advancing nuclear cooperation talks.

This shift signals a pragmatic decoupling of the nuclear agreement from the contentious issue of an Israeli-Saudi normalization, which Riyadh has consistently linked to progress on Palestinian statehood.

However, the deal has raised significant concerns in Israel. Israeli officials fear that advancing a Saudi nuclear program without Israeli consent could undermine regional security, especially given Saudi ambitions to enrich uranium. The Netanyahu government, lacking enough support in the Senate to block the deal, has expressed unease about being sidelined, as Washington appears determined to proceed regardless of Israeli objections.

The situation complicates U.S.-Israel relations and could shift the regional power balance, pressuring Israel to recalibrate its diplomatic and security strategies in response to a more autonomous and nuclear-capable Saudi Arabia.

In sum, the U.S.-Saudi nuclear cooperation initiative reflects a bold recalibration of U.S. West Asia policy under Trump, prioritizing strategic and economic interests with Riyadh while risking heightened tensions with Israel and altering the delicate regional equilibrium.

In his second term as president, Trump seeks to expand the Abraham Accords to as many Arab states as possible in order to create a local peace framework that includes political, economic, and security cooperation. However, the conflict between Israel and Hamas and recent Israeli government activity have made this increasingly difficult. Saudi Arabia and neighboring Arab states condemned Israel's military actions in Gaza, and even MBS accused Israel of genocide, basically tripping down, bringing back the Saudi demand that Palestinian statehood be a precondition for normalization.

The significance of this trip, just after the start of Donald Trump's second term, is worth noting. His choice of Saudi Arabia as his first foreign destination indicates the importance of the Middle East in U.S. foreign policy and sends a strong signal that Washington intends to strengthen and enhance its engagement in the Persian Gulf region. The trip aims to redefine U.S. relations with key regional international partners and build the regional security architecture.

Ultimately, Trump's trip to Saudi Arabia runs much deeper than an ordinary diplomatic visit, containing key strategic messages and fundamental changes in U.S. foreign policy and regional dynamics. With a focus on two main pillars of major investments, advanced arms sales, nuclear cooperation, and necessary reconsideration of the Palestine-Israel issue, the trip could provide a new chapter to the extremely complicated and tense history of West Asia, making fundamental changes to its security, political, and economic equations.

 

 

India and Pakistan accuse each other of ceasefire violations

India and Pakistan accused each other of violating an agreed ceasefire on Saturday, just hours after reaching the US-brokered deal aimed at ending one of the most dangerous escalations between the nuclear-armed rivals in decades, reports Reuters.

The ceasefire, which came after weeks of cross-border missile and drone strikes, was announced earlier in the day following negotiations involving top US and regional officials.

India’s Foreign Secretary Vikram Misri said the ceasefire agreement had been breached “repeatedly” and blamed Pakistan for initiating the violations.

Pakistan’s Foreign Ministry rejected the accusation and blamed Indian forces for violating the ceasefire. In a statement, the ministry said Pakistan remained committed to the truce and was “handling the situation with responsibility and restraint.”

The agreement had been announced earlier in the day by US President Donald Trump on his Truth Social platform. “Congratulations to both Countries on using Common Sense and Great Intelligence,” he wrote, hailing the full and immediate ceasefire deal.

Under the terms of the agreement, both sides pledged to halt all military action by land, air, and sea. Military officials from both countries spoke Saturday afternoon to finalize the terms.

Despite the mutual accusations, both governments have expressed interest in pursuing further talks. US Secretary of State Marco Rubio said discussions would soon begin on a broader agreement at a neutral site.

India and Pakistan agree to ceasefire

US President Donald Trump said on Saturday that India and Pakistan had agreed to a "full and immediate ceasefire" after a fourth day of strikes and counter-strikes against each other's military installations, reports Reuters.

Pakistan's foreign minister also said both countries had agreed to a ceasefire "with immediate effect" and India's foreign ministry said it would start at 5.00pm Indian time, 1130 GMT.

"After a long night of talks mediated by the United States, I am pleased to announce that India and Pakistan have agreed to a full and immediate ceasefire. Congratulations to both Countries on using Common Sense and Great Intelligence," Trump said in a post on Truth Social.

The sudden announcement came on a day when fears spiked that the countries' nuclear arsenals might come into play as Pakistan's military said a top military and civilian body overseeing its nuclear weapons would meet. The officials from both sides showed a willingness to take a step back following the day's exchanges, as the combined civilian death toll on the two sides rose to 66.

"Pakistan and India have agreed to a ceasefire with immediate effect," Pakistani Foreign minister Ishaq Dar posted on X.

"Pakistan has always strived for peace and security in the region, without compromising on its sovereignty and territorial integrity."

India's foreign ministry said that the head of Pakistan's military operations called his Indian counterpart on Saturday afternoon and it was agreed that both sides would stop all firing.

The two heads will speak to each other again on May 12, the ministry added.

The fighting began on Wednesday when India carried out strikes on what it said was "terrorist infrastructure" in Pakistani Kashmir and Pakistan, two weeks after 26 people were killed in an attack on Hindu tourists in Indian Kashmir.

Pakistan denied India's accusations that it was involved in the tourist attack. Since Wednesday, the two countries have exchanged cross-border fire and shelling, and sent drones and missiles into each other's airspace.

The countries have been locked in a dispute over Kashmir since they were born after the end of British colonial rule in 1947. Hindu-majority India and Islamic Pakistan both claim Kashmir in full but rule it in part.

They have gone to war three times since, including twice over Kashmir, and clashed several times.

India blames Pakistan for an insurgency in its part of Kashmir that began in 1989 and has killed tens of thousands. It also blames Pakistani Islamist militant groups for attacks elsewhere in India.

Pakistan rejects both charges. It says it only provides moral, political and diplomatic support to Kashmiri separatists.

 

 

India and Pakistan step up military strikes

Pakistan and India launched strikes and counter-strikes against each other's military installations on Saturday, prompting US calls for the nuclear-armed neighbours to begin talks and defuse their escalating conflict, the most intense since 1999.

Fears that the countries' nuclear arsenals might come into play spiked when the Pakistan military said a top military and civil body overseeing its nuclear weapons would meet, but the defence minister later said no such meeting was scheduled.

As tensions remain high, residents across Pakistan and India have rushed to stockpile food and other essential supplies, while families living near the border fled to safer areas. Indian authorities have installed sirens in high-rise buildings in New Delhi, some 650 kilometres (400 miles) from the border.

Pakistan early on Saturday said it had targeted multiple bases in India, including a missile storage site in India's north, in response to prior attacks by the Indian military.

India said there was limited damage to equipment and personnel at four air force stations. The military said there were several high-speed missile attacks on air bases in Punjab state and that India had responded to the attacks.

Five civilians were killed in the attacks in the Jammu region of Indian Kashmir, regional police said. Hindu-majority India and Islamic Pakistan both claim Kashmir in full but rule it in part.

Blasts rang out across Indian Kashmir and the Sikh holy city of Amritsar in neighbouring Punjab until early morning on Saturday. Jammu streets were empty hours after loud blasts were heard and projectiles were seen flying across the city sky.

"Jammu city has never been hit before. Never thought we will be hit like this," said 60-year-old Rajeev Gupta, whose brother was wounded by a shell.

Pakistan said that, before its offensive, India had fired missiles at three air bases, including one close to the capital, Islamabad, but Pakistani air defences intercepted most of them.

Locked in a longstanding dispute over Kashmir, the two countries have engaged in daily clashes since Wednesday when India launched strikes inside Pakistan on what it called "terrorist infrastructure". Pakistan vowed to retaliate.

Pakistan's information minister said in a post on X that Saturday's military operation was named "Operation Bunyanun Marsoos". The term is taken from the Koran and means a firm, united structure.

India has said its strikes on Wednesday, which started the latest round of clashes that have left more than 50 people dead in both countries, were in retaliation for a deadly attack on Hindu tourists in Indian Kashmir last month.

Pakistan denied India's accusations that it was involved in the tourist attack. Since Wednesday, the two countries have exchanged cross-border fire and shelling, and sent drones and missiles into each other's airspace.

Despite growing Western calls for peace, defence experts said the opposite seemed to be happening.

"Operations moving to next level - free use of missiles and drones by both sides," said Pravin Sawhney, a defence author and former Indian Army officer. "And reports that Pakistan Army is moving troops forward. Not good indications of what lies ahead!"