The stock market extended its decline on Tuesday as investors booked profits following an extended rally, while concerns over inflation, current account pressures, and global economic uncertainty weighed on sentiment.
The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index settled at 160,101.02 points, down 2,062.79 points, or -1.27%, from the previous close of 162,163.81.
During the session, the index rose to an intraday high of 163,380.67 points, up 1,216.86 points, or 0.75%, before dropping to a low of 159,805.34 points, reflecting a decline of 2,358.47 points, or 1.45%.
“The market is taking a correction after the massive rally. With the result season ending shortly, the market will look for new impetus for its next move,"said Ahfaz Mustafa, CEO of Ismail Iqbal Securities. "Concerns about the current account and inflation are also playing their part,” he added.
Investor sentiment was further tempered after the State Bank of Pakistan (SBP) on Monday decided to keep the policy rate unchanged at 11% for the fourth consecutive meeting, citing an improving growth outlook and a milder-than-expected impact of recent floods. The central bank’s decision aligned with market expectations.
Meanwhile, the World Bank maintained its growth forecast for FY26 at 3%, warning that Pakistan’s economic recovery remains constrained amid tight fiscal policies and exposure to climate risks. The lender projected growth to improve to 3.4% in FY27, contingent on continued reforms and macroeconomic stability.
The Finance Division projected Consumer Price Index (CPI) inflation to remain between 5–6% in October, following September’s reading of 5.6%, compared with 6.9% in the same month last year. During July–September FY26, average inflation stood at 4.2%, down from 9.2% in the corresponding period of FY25.
In the previous session, the benchmark index had closed at 162,163.81 points, down 1,140.32 points, or 0.7%, after trading between a high of 163,570.83 points and a low of 161,766.61 points.