KARACHI: After beginning on a bearish note, the stock market rebounded during mid-session value-hunting on Monday in a roller-coaster trading session.

Ahsan Mehanti from Arif Habib Corporation noted that the market experienced a pre-budget rally as investors considered the finance minister`s hints regarding a construction package in the federal budget for 2025-26.

He added that the equity investors were also encouraged by strong economic indicators related to remittances, inflation, and foreign exchange reserves, along with hopes for $1 billion in the International Monetary Fund`s (IMF) climate funding approvals ahead of the review under the Extended Fund Facility.

Topline Securities Ltd noted that the stock market commenced the weekon a bearish note, with the index plunging to an intraday low of 943 points. The initial downturn was fuelled by concerns over the court`s decision to uphold the windfall tax. Marketsentiment remained fragile as the Federal Board of Revenue (FBR), following the Sindh High Court`s directive, successfully recovered Rs23 billion in a single day from 16 banks,further amplifying investor unease.

However, the tide shifted in the latter half of the session, led by a robust recovery in the E&P sector. The market staged animpressive rebound, surging to an intraday high of 1,772 points. Investor sentiment improved following reports that the government is again prioritising the resolution ofcircular debt.

Media sources indicate that authorities are exploring various avenues to address the issue, including a potential Rs1.2 trillion borrowing plan from banks, capitalising on the recent decline in interest rates. Additionally, the government is keen on finalising the term sheet ahead of the IMF mission`s arrival, further strengthening market confidence.

Ultimately, bulls took control, propelling the index to close at 114,330 points, posting a gain of 1,529 points or 1.36pc dayon-day.

The rally was primarily driven by Fauji Fertiliser, MCB Bank, OGDC, Pakistan Petroleum, and United Bank, which collectively contributed 810 points to the index.

Conversely, Habib Bank, Askari Bank, National Bank, Millat Tractors, PSX, and Lucky Core Industries acted as a drag, erasing 189 points.