KARACHI – The Pakistan Stock Exchange (PSX) extended its downward trend for a second consecutive week, with the KSE-100 index closing at 173,170 points. The week-on-week decline of 3.6% reflects ongoing foreign selling, geopolitical tensions, and cautious investor sentiment ahead of the upcoming IMF review.
The PSX opened the week with a sharp sell-off, dropping 5,150 points (-2.87%) to 174,454. Analysts note that the benchmark index has declined nearly 9.5% from its January 2026 peak of 191,000, signaling a significant market correction. Despite a mid-week rebound of 5,703 points (+3.29%) to 178,853, selling pressure returned, pushing the KSE-100 down 6,683 points (-3.74%) on Thursday.
The PSX’s volatility comes amid heightened global uncertainty. Experts point to rising tensions between Iran and the United States, which have lifted international oil prices and dampened investor confidence worldwide. On the domestic front, an IMF mission is scheduled to arrive on February 26 to assess Pakistan’s progress under the $7 billion Extended Fund Facility, further influencing market sentiment.
Economic indicators show mixed signals. Large-scale manufacturing (LSM) grew 0.4% year-on-year in December 2025, while net foreign direct investment (FDI) dropped 41% to $981 million during the first seven months of FY26. The trade deficit widened to $2.76 billion in January 2026, although exports increased by 3.5% year-on-year.
Market analysts advise investors to monitor the PSX closely, given ongoing corrections and global pressures. “The index remains sensitive to both international developments and domestic economic factors,” said Syed Danyal Hussain of JS Global.
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The week’s performance highlights the need for cautious trading on the PSX. With geopolitical tensions, foreign outflows, and upcoming IMF discussions, market participants are advised to stay informed before making investment decisions.
