The Pakistan Stock Exchange (PSX) experienced a highly volatile week, with the benchmark KSE-100 index closing at 153,866 points. This marked a significant decline of 3,630 points, or approximately 2.3 percent, compared to the previous week’s closing figures. The downturn was primarily influenced by a sharp increase in global crude oil prices coupled with escalating geopolitical tensions between the United States and Iran, which collectively dampened investor sentiment throughout the week.
The week began on a particularly turbulent note as the KSE-100 index suffered a dramatic plunge on Monday, shedding 11,016 points — a staggering 6.99 percent drop — to settle at 146,480 points. This steep fall represented the second-largest single-day point decline in the history of the PSX, underscoring the market’s sensitivity to external shocks. However, the market demonstrated resilience on Tuesday, rebounding strongly with a gain of 9,697 points, or 6.62 percent, closing at 156,177 points. This impressive recovery was recorded as the second-highest single-day point increase ever witnessed on the exchange.
Midweek trading sessions presented a mixed picture. On Wednesday, the index slipped slightly by 319 points, a marginal decline of 0.20 percent, ending the day at 155,858 points. The downward trend continued on Thursday, with the KSE-100 retreating by 1,437 points, or 0.92 percent, to close at 154,421 points. The week concluded with subdued activity on Friday, as the index fell a further 555 points, representing a 0.36 percent decrease. This sequence of fluctuations highlighted the ongoing uncertainty and cautious stance adopted by investors amid the prevailing geopolitical and economic challenges.
Market analysts from Arif Habib Limited (AHL) attributed Monday’s sharp downturn primarily to the surge in crude oil prices, which were driven higher by the intensifying conflict in the Gulf region. Despite this initial shock, the market managed to regain some of its losses later in the week, reflecting a degree of investor optimism and short-term recovery efforts. Nevertheless, the overall weekly performance remained negative, with the KSE-100 index ending 2.3 percent lower than the previous Friday’s close.
On the macroeconomic front, the State Bank of Pakistan (SBP) opted to keep its policy rate steady at 10.5 percent. The central bank cited the ongoing uncertainty stemming from the Middle East conflict and fluctuating commodity prices as key factors influencing its decision. Meanwhile, petroleum sales data revealed a 13 percent year-on-year increase in February, reaching 1.28 million tons. This growth was largely fueled by higher demand for motor spirit and high-speed diesel. However, monthly sales experienced a 15 percent decline compared to January, attributed to the Ramadan-related slowdown and fewer operational days in the month. Cumulatively, petroleum sales for the first eight months of the fiscal year 2026 showed a modest 4 percent rise, totaling 10.96 million tons.
Market observers noted that the persistent geopolitical tensions continued to exert downward pressure on investor confidence, with the KSE-100 index now trading nearly 19 percent below its January 2026 peak of 189,167 points. Trading activity remained highly volatile as investors adopted a cautious approach, awaiting further clarity on upcoming macroeconomic developments and policy decisions.
Adding to the economic backdrop, the International Monetary Fund (IMF) released its end-of-mission statement following the third review of Pakistan’s Extended Fund Facility (EFF). While acknowledging progress in ongoing discussions, the IMF emphasized the country’s vulnerability to external shocks, particularly fluctuations in global energy prices. This assessment underscored the delicate balance Pakistan faces in navigating both domestic economic challenges and international uncertainties in the months ahead.
