KSE-100 closes 579 points lower as late-session selling erases intra-day gains

The Pakistan Stock Exchange (PSX) experienced a volatile session on Monday, as its benchmark swayed in both directions before closing the day lower by 579 points.

The index started the session with a strong buying rally, crossing 191,000 for the first time in history ahead of the scheduled State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) meeting.

However, the later hours witnessed selling pressure, pushing the KSE-100 to an intra-day low of 188,268.39.

At close, the benchmark index settled at 188,587.66, down by 579.17 points or 0.31%.

“The choppy trading pattern was largely driven by investor caution ahead of the Monetary Policy Committee meeting scheduled for this evening, which kept market participants on the sidelines.

“On the result front, MARI from the E&P sector announced its 1HFY26 results, reporting an EPS of Rs23.89/share—below our expectations due to higher-than-anticipated operating and exploration costs. The company also declared an interim dividend of Rs8.3/share for 2QFY26,” brokerage house Topline Securities said in its post-market report.

Select index heavyweights—SYS, SAZEW, and MTL—offered some support, collectively contributing 305 points to the index. However, this was outweighed by selling pressure in MEBL, ENGROH, PIOC, FATIMA, and LUCK, which together shaved 553 points off the benchmark, Topline reported.

The SBP decided on Monday to keep its benchmark policy interest rate unchanged at 10.5% in its first MPC meeting of 2026.

SBP Governor Jameel Ahmad announced the decision in a press conference. Inflation in Pakistan could be above 7% in some months of the current year’s second half, he said.

The country’s gross domestic product (GDP) would grow by 3.75% to 4.75% this year, Ahmad envisaged.

“The [stock] market may face near-term selling pressure following SBP’s status quo decision, which came as a negative surprise. However, the 185k level is expected to act as the first key support,” Ali Najib, Deputy Head of Trading, Arif Habib Ltd said.

The committee observed that headline inflation of 5.6% y/y in December 2025 was in line with its expectation. “However, core inflation has steadied around a relatively higher level of 7.4% in recent months”.

Single-digit rates back in sight at upcoming MPC

Analysts had been expecting further monetary easingmeeting, with a policy rate cut of 50 to 100 bps.

Pakistan is unlikely to achieve the International Monetary Fund’s (IMF’s) projected 3.2% GDP growth for the current fiscal year as exports and investments continue to weaken.

This was the consensus among leading economists while talking to Business Recorder, who forecasted a GDP growth more likely to remain between 2.5% and 3%, provided macroeconomic stability was maintained, and no major shocks emerge.

During the previous week, the PSX capped off a powerful week of gains as the benchmark KSE-100 Index surged to an all-time closing high of 189,166.83 points, rising 4,068 points or 2.2% week-on-week, supported by easing geopolitical tensions, renewed foreign engagement, falling government bond yields, and strengthening expectations of further monetary easing.

Internationally, gold surged past $5,000 per ounce on Monday, buoyed by safety flows amid dollar weakness following a turbulent week where tensions over Greenland and Iran rattled investors, while markets remained on tenterhooks after violent spikes in the yen.

The yen rose over 1% to 153.99 per dollar as of 0427 GMT, after sharp spikes on Friday sparked speculation over potential intervention. The New York Federal Reserve conducted rate checks on Friday raising the chance of joint US-Japan intervention to halt the currency’s slide.

The prospect of joint intervention to support the yen pulled the dollar lower and broadly lifted other currencies.

Japan’s Nikkei dropped about 2% while S&P 500 futures fell 0.25% and European futures were 0.27% lower as traders awaited the Federal Reserve’s policy meeting later in the week.

US President Donald Trump provided temporary relief to markets last week by reversing tariff threats and downplaying potential forceful action against Greenland. However, further sanctions targeting Iran have reinforced market anxiety.

Increased US pressure against Iran is pushing oil prices higher and lifting safe-haven gold to record peaks. Precious metals, including silver, have surged in a blistering rally so far this year, also aided by a softer dollar.

Meanwhile, the Pakistani rupee registered marginal gain against the US dollar in the inter-bank market on Monday. At close, the local currency settled at 279.85, a gain of Re0.01 against the greenback.

Volume on the all-share index decreased to 870.44 million from 877.56 million recorded in the previous close. The value of shares declined to Rs57.19 billion from Rs58.59 billion in the previous session.

K-Electric Ltd was the volume leader with 172.82 million shares, followed by WorldCall Telecom with 37.15 million shares, and Pak Int.Bulk with 29.00 million shares.

Shares of 487 companies were traded on Monday, of which 143 registered an increase, 298 recorded a fall, and 46 remained unchanged.