KARACHI: The Pakistan Stock Exchange (PSX) started the week on a sluggish note, marked by extreme volatility on Monday, as investors took profits following a record-breaking rally in the weekend session.

In early trade, the benchmark KSE-100 index surged past the 191,000 milestone on hopes of a rate cut, but aggressive selling towards the end of the session, ahead of the State Bank of Pakistan’s (SBP) decision, pushed the index into the red.

Topline Securities Ltd noted that the local bourse experienced a highly volatile session, with the benchmark index opening on a positive note and rallying to an intraday high of 1,865 points. However, sentiment turned cautious in the second half, with investors opting to lock in recent gains, pulling the index down to an intraday low of 898 points. The market ultimately closed at 188,587, down by 579 points or 0.31 per cent.

The choppy trading pattern was primarily driven by investor caution ahead of the Monetary Policy Committee meeting scheduled later in the evening, which kept market participants on the sidelines.

On the result front, Mari Energies announced its 1HFY26 results, reporting an earnings per share of Rs23.89, below expectations due to higher-than-anticipated operating and exploration costs. The company also declared an interim dividend of Rs8.3 per share for 2QFY26.

Arif Habib Ltd (AHL) said PSX ended the PSX remained range-bound with the oscillated in both directions as investors trimmed positions at higher levels ahead of the SBP Monetary Policy announcement.

The central bank its policy rate unchanged at 10.50pc, contrary to market expectations of a cut toward 10pc. However, to support liquidity, SBP reduced the average Cash Reserve Requirement (CRR) from 6pc to 5pc to stimulate private-sector credit growth.

SBP also revised its FY26 fundamental GDP growth outlook to 3.75-4.75pc, while inflation is expected to stabilise within the 5-7pc target range in FY26-FY27 after temporary pressures.

Moreover, steady remittances and favourable commodity prices are likely to keep the current account deficit contained at 0-1pc of GDP. At the same time, foreign exchange reserves are projected to exceed $18bn by June, improving further in FY27.

On the index front, Meezan Bank, Engro Holdings, Pioneer Cement, Fatima Fertiliser, and Lucky Cement were key laggards, collectively shedding 556 points, while Sazgar Engineering Works, Systems Ltd, Millat Tractor, Javedan Cement, and Fauji Fertiliser added 401 points and rescued falling market momentum.

Overall, market participation remained moderate, with trading volume falling to 867.07m shares and the traded value of Rs57.1bn.

Analysts expect the market may face near-term selling pressure following SBP’s status quo decision, which came as a negative surprise. However, the 185,000 level is likely to serve as the first key support level.

Published in Dawn, January 27th, 2026