The PSX outlook today depends on two things: the Middle East conflict and the State Bank of Pakistan's rate decision due on October 26. The KSE-100, the benchmark index of the Pakistan Stock Exchange (PSX), closed the week at 162,375 after losing 4,045 points, or 2.4%, as regional tensions and rising oil prices weighed on the market. Brokerages expect the central bank's Monetary Policy Committee to be the next major event for investors, although most expect interest rates to stay unchanged.
What drove the week's sell-off
The market stayed volatile through the week as Houthi attacks on Saudi Arabia continued. Reports said the United States was planning an attack on Iran after the midterm elections, but those reports remain unconfirmed. Brent crude rose 6.4% over the week to $114.9 per barrel on Friday, which added pressure on the broader market.
Banking was the largest drag on the index, costing it 925 points, followed by technology at 512 points and investment banks at 507 points. ENGROH was the single biggest negative contributor, subtracting 489 points. Refineries fell 10.1% over the week, the steepest sector decline, while modarabas gained 5.2%.
Institutions were net sellers. Mutual funds sold a net $10.2 million and foreign investors sold a net $5.7 million, while individual investors bought $14.0 million. Trading slowed as well: average volumes fell 12.6% to 393 million shares, although a separate brokerage report put average daily volume at 496 million shares, a 13.4% weekly decline, so the two figures differ. Year to date, the KSE-100 is down 6.7%.
Economy, energy and prices
Brokerages said improving economic indicators could help the market regain momentum. Pakistan's growth estimate for FY2025-26 was revised down to 3.65% from the provisional 3.70%, according to figures released on October 19, 2026. The World Bank projects growth of 3.8% for FY2026-27 and expects inflation to reach 8.2%, up from 7.1% in FY2025-26.
Liquid foreign exchange reserves, the dollars the country holds to pay for imports, stood at $26.83 billion as of October 16, 2026. The State Bank's own reserves rose to $21.49 billion, and the rupee closed at Rs276.82 against the US dollar. Import cover was 3.01 months.
Motor spirit, or petrol, fell by about Rs12.5 per litre to Rs377.71, and high-speed diesel fell by about Rs5.2 per litre to Rs391.75, following lower ex-refinery prices. Electricity generation cost rose 32% year on year to Rs9.35 per kilowatt-hour, and power distribution companies have sought a fuel charge adjustment of Rs2.56 per kilowatt-hour for September 2026.
Timeline: what has happened so far
- October 16, 2026: Liquid reserves stood at $26.83 billion, down $30.3 million over the week.
- October 19, 2026: The FY2025-26 growth estimate was revised to 3.65%.
- Week ended Friday: The KSE-100 fell 2.4% to 162,375, and Brent rose 6.4% to $114.9 per barrel.
- October 26, 2026: The SBP's Monetary Policy Committee meets on the policy rate.
Aasan alfaaz mein
Is hafte KSE-100 index 4,045 points gir kar 162,375 par band hua, jis ki wajah Middle East ki kashidgi aur oil ki qeemat mein izafa tha. State Bank 26 October ko shrah-e-sood (interest rate) ka faisla karega, aur zyadatar analysts ka khayal hai ke rate barqarar rahega. Petrol Rs12.5 fi litre sasta hua hai, lekin bijli ki paidawar ki laagat barh gayi hai, is liye bill aur ghar ke kharche par nazar rakhein.
