The Pakistan Stock Exchange’s benchmark KSE-100 index has had a turbulent 2026. In January it crossed 188,000 points for the first time, peaking at 188,579, BOL News reported. Since then, the war in the Middle East and the oil price shock have driven sharp swings.
The IMF bounce
As Pakistan and the IMF neared a staff-level agreement in early October, the index gained 2,593 points (1.56%) to close at 168,460 on October 6, Gulf News reported. The deal, which will unlock about $1.2bn once the IMF Board approves it, reduces the risk of a balance-of-payments squeeze. Read our full breakdown of the agreement.
The oil factor
Brent crude settled at $116.72 a barrel on October 23, a five-month high. For Pakistan, which imports most of its oil, that means:
- A bigger import bill and pressure on the rupee.
- Stickier inflation, which reduces room for interest-rate cuts.
- Gains for exploration and production companies, while refiners, power producers and transport face higher costs.
Interest rates
The IMF has asked the State Bank of Pakistan to keep policy tight until inflation durably returns to target. Headline inflation eased to about 10.3% in September. While rates stay high, bank deposits and government securities compete with equities for savers’ money.
Lessons from the region
On October 16, Indonesian stocks crashed as much as 11.4% after MSCI warned it could downgrade the market, a reminder of how index decisions move foreign money. See our report from Jakarta.
What investors are watching
- IMF Executive Board approval and the next tranche.
- Any breakthrough or escalation in the Strait of Hormuz.
- Monthly inflation data and the State Bank’s next policy decision.
- Remittance inflows, which reached $10.9bn in Q1 FY27.
This article is for information only and is not investment advice. More in Markets.
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