Overall market participation was strong, as 1,066 million shares were traded with a total value of Rs. 49 billion. KEL led the volume chart, with 195.8 million shares..Photo: Express
KARACHI:
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 index declined 2.1%, or 3,560 points, in October to close at 166,409, as geopolitical uncertainty, foreign portfolio outflows and profit-taking in heavyweight stocks weighed on investor sentiment. The market staged a four-day recovery towards the end of the week, gaining more than 4,800 points to reclaim the 167,000 level on Thursday, before profit-taking pulled the index back below the threshold on Friday.
On a day-on-day basis, the market commenced the last trading week of October with a volatile session, but despite that the KSE-100 index gained 664 points (+0.41%) to close at 163,039, reclaiming the 163,000 level. On Tuesday, monetary policy caution and diplomatic optimism caused a balance, helping the bourse surge 1,429 points (+0.88%) to cross the 164,000 mark at 164,467.
On Wednesday, the index extended its recovery, rising 1,269 points (+0.77%) to close at 165,736. PSX continued the positive trend the next day, Thursday, where the benchmark index added 1,457 points (+0.88%) at 167,193, surpassing the 167k level. However, profit-taking dragged it below 167k on Friday after a four-day rally as the index fell 784 points (-0.47%) to settle at 166,409.
Arif Habib Limited (AHL) noted that the KSE-100 index dropped 3,560 points (-2.1%) in Oct’26 to close at 166,409. Persistent geopolitical tensions kept investor sentiment subdued, while oil price movements added to cautious trading. Also, the State Bank increased the policy rate by 50 basis points to 12% at its Monetary Policy Committee (MPC) meeting on October 26, citing higher energy prices and geopolitical uncertainty that impacted the domestic inflation outlook.
Earlier, AHL mentioned, Pakistan and the IMF reached a staff-level agreement on the fourth Extended Fund Facility (EFF) and third Resilience and Sustainability Facility (RSF) reviews, paving the way for $1 billion and $210 million in disbursements, respectively, subject to the executive board approval, which would bring total disbursements under both programmes to $5.7 billion.
During the month, the committee reviewing Pakistan’s Automotive and Auto Parts Manufacturing Policy 2026-31 proposed reforms to boost exports, accelerate New Energy Vehicle (NEV) adoption and enhance competition. Key measures included lower sales tax on NEVs, reduced import tariffs, mandatory export targets for manufacturers, localisation requirements and incentives for incremental exports.
Treasury bill cut-off yields rose in Oct’26, largely following the SBP’s 50-basis-point rate hike. The one-month yield went up from 11.68% to 12.11%, three-month from 11.99% to 12.43%, six-month from 12.45% to 12.65% and 12-month from 12.49% to 12.89%. Additionally, the central bank doubled the minimum capital requirement for banks to Rs20 billion, to be met by Dec’30, with statutory reserves now eligible.
Power generation rose 5% year-on-year to 13,217 gigawatt hours (GWh) in Sept’26, driven by higher hydel, local coal, imported coal and wind generation. The cost of generation soared 32% YoY to Rs9.35 per kilowatt-hour due to a higher share of re-gasified liquefied natural gas, high-speed diesel and furnace oil along with elevated crude prices, prompting distribution companies to seek a positive fuel cost adjustment of Rs2.56/kWh.
Gross Roshan Digital Account (RDA) inflows reached $14.2 billion as of Sept’26. Of these, $2.1 billion was repatriated and $8.9 billion utilised locally, leaving a net liability of $3.1 billion. Meanwhile, the KSE-100 index profitability (based on 96% of the index weight) increased 26% YoY in 9MCY26, reaching Rs1,638 billion. Average trading volumes at the PSX fell 21.8% month-on-month to 471.9 million shares in Oct’26, while average traded value dipped 20.2% to $70.1 million, AHL said. Topline Securities stated that the KSE-100 index declined 2.09% on a MoM basis during October 2026, primarily due to geopolitical uncertainty, foreign portfolio outflows, profit-taking in heavyweight stocks and cautious investor sentiment amid global financial market volatility and domestic macroeconomic concerns.
Major developments during the month included a moderation in Pakistan’s CPI inflation to 10.26% in September 2026, compared to 11.15% in August 2026, while remaining above 5.76% recorded in September 2025. Automobile sales declined 12% YoY and 3% MoM to 15,104 units, as reported by the auto manufacturers association. Average daily traded volumes and value during the month stood at 600 million shares (up 27% MoM) and Rs23 billion (up 19% MoM), respectively, Topline added.
