KARACHI: The Pakistan Stock Exchange (PSX) posted marginal gains on Monday on value-hunting, despite strong anticipation of an interest rate hike later in the day.
The benchmark KSE-100 index closed above 163,000 points after remaining depressed in recent weeks amid elevated oil prices, mounting inflationary pressures and persistent geopolitical concerns.
Topline Securities Ltd said the PSX staged a modest recovery, with the benchmark closing at 163,038.47 points, up 663.59 points, or 0.41 per cent. The index traded between 161,250 and 163,477 points, reflecting continued volatility amid cautious investor sentiment.
The recovery provided some relief after five consecutive weeks of declines, although broader market sentiment remained sensitive to domestic and external economic developments.
Index recovers 664 points amid cautious trading ahead of SBP rate decision
Investor sentiment remained cautious amid persistent geopolitical tensions, elevated international oil prices and expectations about the State Bank of Pakistan’s (SBP) monetary policy decision. Market participants continued to assess the potential implications of these factors for inflation, interest rates and the broader economic outlook.
Ali Najib, Deputy Head of Trading at Arif Habib Ltd, noted continued volatility as the market moved in both directions amid cautious investor sentiment ahead of the Monetary Policy Committee announcement, which raised the policy rate by 50 bps, from 11.50pc to 12.00pc in the evening, in line with expectations.
The decision reflects heightened geopolitical risks from the US-Iran conflict, which have pushed up global oil and food prices and raised concerns about domestic inflation.
On the geopolitical front, Pakistan’s Chief of Defence Forces arrived in Tehran on Monday for talks involving Iran and members of the Makkah defence pact, including Pakistan, Saudi Arabia and Türkiye, amid escalating regional tensions following Houthi attacks on Saudi Arabia.
United Bank, Engro Holdings, Lucky Cement, Oil and Gas Development Company and Mari Energies collectively contributed 719 points to the index. Conversely, Meezan Bank, Engro Fertiliser, Fauji Fertiliser Company, Pakistan Services Ltd and Habib Bank collectively eroded 367 points.
Despite a mild recovery rally, investor participation weakened as total trading volume dipped 5.74pc to 376 million shares and total turnover fell 11.04pc to Rs16.19 billion. LSE Financial (R) topped the volume chart with 25.4m shares.
Analysts expect markets to have largely priced in today’s 50bps rate hike, potentially supporting a short-term recovery in interest-rate-sensitive sectors. Still, the index may remain volatile between 160,000 and 168,000 this week amid cautious sentiment and shifting macroeconomic and geopolitical developments, including talks between Iranian officials and representatives from Pakistan, Saudi Arabia, and Türkiye.
Published in Dawn, October 27th, 2026
