Foreign outflows and a lacklustre earnings season pushed the equity market lower on Monday, while domestic political churn and uncertainty over the direction of International Monetary Fund (IMF) linked policy kept sentiment firmly risk-off.
"Stocks staged a massive selloff as investors weigh the impact of the super tax on high-earning corporates, projections for higher inflation and US India trade deal on Pakistan exports," said Ahsan Mehanti, Managing Director and CEO, Arif Habib Commodities.
He further added: "Political noise, uncertainty over outcome of IMF talks and concerns for fiscal impact of aligning SOEs losses played a catalyst role in bearish activity at PSX."
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index settled at 174,453.93 points, down 5,149.80 points, or -2.87%, from the previous close of 179,603.73.
The index reached an intraday high of 179,969.22, gaining 365.49 points, or 0.2%, and recorded a session low of 173,574.26, dropping 6,029.47 points, or -3.36%, against the previous close of 179,603.73.
"The market remained under pressure due to persistent foreign selling and corporate earnings that failed to justify elevated valuations," said Huzaifa Riaz, Director, Mayari Securities (Pvt) Limited.
"Ongoing domestic political developments further dampened sentiment, keeping investors cautious and adding to the weakness," he added.
Analysts expect measured activity in the coming week as Ramazan begins, with shorter sessions and subdued participation likely to cap momentum.
The corporate results season could still offer support if earnings surprise on the upside, while upcoming trade and current account data will be watched for any sign of stabilisation that could limit further downside.
Remittances rose 15% YoY to $3.5 billion in January 2026, though they slipped 4% month-on-month. Automobile sales rebounded to about 23,000 units in January, according to the Pakistan Automotive Manufacturers Association.
Meanwhile, changes in Morgan Stanley Capital International's (MSCI) February review led to removals and inclusions of Pakistani equities, triggering portfolio adjustments.
Gas production fell 7.8% WoW to 2,798 million cubic feet per day, while oil output dropped 11.7% to 59,121 barrels per day in early February. Central government debt increased 1.3% MoM to Rs78.5 trillion as of December 2025, showing a 9.6% annual rise.
On Friday, the KSE-100 fell 908.92 points (0.50%) to close at 179,603.73, after moving between 180,832.66 and 178,237.14.
