KSE-100 sheds 3,560 points in October to close at 166,409
The KSE-100 gave up 3,560 points, or 2.1%, in October to close at 166,409, even after a four-day rally added more than 4,800 points and briefly pushed the index past 167,000. Arif Habib Limited attributed the monthly decline to persistent geopolitical tension, oil price movements and profit-taking, while Topline Securities also pointed to foreign portfolio outflows and caution amid global financial market volatility and domestic macroeconomic concerns.
The State Bank of Pakistan raised its policy rate by 50 basis points to 12% at its October 26 Monetary Policy Committee meeting, citing higher energy prices and geopolitical uncertainty in the inflation outlook. Treasury bill cut-off yields followed: the one-month yield rose to 12.11% from 11.68%, the three-month to 12.43%, the six-month to 12.65% and the 12-month to 12.89%. The central bank separately doubled the minimum capital requirement for banks to Rs20 billion, to be met by Dec'30, with statutory reserves now eligible.
The last week of October showed how quickly sentiment could turn. The index added 664 points on Monday to 163,039, then 1,429 points on Tuesday to 164,467 as monetary policy caution balanced diplomatic optimism. It gained another 1,269 points on Wednesday to 165,736 and 1,457 points on Thursday to 167,193, before profit-taking pulled it down 784 points on Friday to 166,409.
On the macro side, Arif Habib Limited said Pakistan and the IMF reached a staff-level agreement on the fourth Extended Fund Facility and third Resilience and Sustainability Facility reviews, paving the way for $1 billion and $210 million in disbursements respectively subject to executive board approval, which would bring total disbursements under both programmes to $5.7 billion. Consumer price inflation moderated to 10.26% in September 2026 from 11.15% in August, though it remains above the 5.76% recorded in September 2025, Topline Securities said.
Liquidity thinned as the month wore on. Arif Habib Limited put average daily volumes at 471.9 million shares, down 21.8% month-on-month, and average traded value at $70.1 million, down 20.2%. Topline Securities reported average daily volumes of 600 million shares, up 27% month-on-month, and value of Rs23 billion, up 19%. Earnings offered some support: KSE-100 profitability rose 26% year-on-year in the first nine months of 2026 to Rs1,638 billion, based on 96% of index weight.
