KARACHI: The Pakistan Stock Exchange (PSX) faced a significant setback on Monday, ending a seven-session record-setting spree, as concerns over the widening trade deficit, rising inflation, and fiscal issues raised by the visiting International Monetary Fund (IMF) mission weighed on market sentiment. The benchmark KSE 100 index fell below the 167,000 mark, losing nearly 3,000 points intraday amid aggressive profit-taking.

While the index saw some recovery towards the close of the session, as value-hunting provided partial support, the market still ended in the red. According to Topline Securities Ltd, the PSX closed lower, impacted by escalating geopolitical concerns over India, cautious investor sentiment, and heightened profit-taking. The index traded within a wide range, touching an intraday high of 336 points and a low of 2,992 points, before settling at 167,752, down 1,237 points, or 0.73 per cent.

The sharp drop was primarily driven by declines in major stocks, including Engro Holdings, Meezan Bank, Hub Power, Bank Alfalah, and United Bank, which together contributed to a 625-point loss in the index. However, stocks like Fauji Fertiliser, Adamjee Insurance, and Habib Bank provided some support, contributing 279 points to the index’s recovery.

Market activity declined, with total traded volume falling 19 per cent to 1.27 billion shares compared to the previous session. The total traded value also dropped by 23.04pc to Rs 60.5 billion. Bank of Punjab led the volume chart, with 131 million shares changing hands.

Ali Najib, Deputy Head of Trading at Arif Habib Ltd, noted that the PSX started the week on a negative note, breaking through several support levels — 169,000, 168,000, 167,000, and 166,000 — amid heavy profit-taking near the psychological 170,000 level.

On the economic front, Bloomberg reported that Pakistan recorded the world’s second-fastest dec­line in sovereign default risk, following Turkiye. This was seen as a positive development for investor confidence. Additionally, Pakistan marked a milestone in its export diversification efforts by delivering its first batch of rare earth elements and critical minerals to US Strategic Metals.

Despite these encouraging signs, selling pressure persisted across key sectors, including oil and gas, power, banking, cement, and autos, pulling the market further down.

Published in Dawn, October 7th, 2025