PSX tumbles nearly 2,000 points as political tensions rattle investors

Pakistani shares came under heavy selling on Monday, with the benchmark KSE-100 index falling nearly 2,000 points by midday as renewed political tension at home shook investors, The Express Tribune reported.

At 12:28pm, the index stood at 166,278.52, down 1,876.97 points, or 1.12 percent, from the previous close of 168,155.49. It had earlier hit an intraday low of 166,167.79, a fall of 1,987.70 points, or 1.18 percent.

How the day unfolded

• Opening bell: the index shed more than 1,600 points in the first minutes of trading
• 9:43am: it briefly recovered to 167,606.83, down 548.66 points, before losses deepened again
• Intraday high: 167,918.36
• Midday volume: 72.4 million shares worth Rs4.55 billion

Politics weighs on sentiment

The sell-off followed the collapse of talks between the government and the PTI over the weekend. The PTI went ahead with its long march, launched from Lakki Marwat on Sunday, and the two sides remain divided over counterterrorism policy in Khyber Pakhtunkhwa and access to the party’s jailed founder, Imran Khan.

The deadlock has deepened fears of a new political confrontation and possible disruption to business and transport. Federal ministers have said the march will not be allowed into Islamabad, and the government is openly weighing governor’s rule in KP, while the PTI has warned of serious consequences if such a step is taken.

Oil offers little relief

Global oil prices fell on Monday, with Brent slipping to around $101.59 a barrel, as Middle East exports rose and G7 countries prepared to release 100 million barrels from emergency stocks. Lower oil prices would normally ease pressure on Pakistan’s import bill and inflation, but they could not offset the immediate hit to confidence from the political uncertainty.

A volatile stretch

The fall continues a choppy few weeks for the market:

• September 29: the index fell 825 points to slip below 170,000 for the first time in seven sessions
• September 30: it rebounded more than 1,600 points to 171,211 on hopes for the IMF review
• October 5: political tensions sent it back below 167,000

Investors are also watching the IMF’s review of Pakistan’s $7 billion loan programme. The mission, led by Iva Petrova, began formal talks with Finance Minister Muhammad Aurangzeb last week. A successful review could release about $1.2 billion: $1 billion under the main programme and $200 million under its climate facility.

The debt backdrop

The market is also weighed down by the scale of Pakistan’s borrowing. Public debt reached Rs86.7 trillion at the end of June 2026, up 76 percent in four years, and the government plans to borrow Rs6.86 trillion in the current fiscal year, according to the finance ministry.

Why it matters

The stock market is a quick barometer of confidence in Pakistan’s economy. Monday’s slide shows how quickly political instability can wipe out gains built on economic progress, and why investors want the government and the opposition to settle their dispute through dialogue rather than on the streets. Read our reports on the PSX’s rally on IMF hopes and on Afridi rejecting emergency rule.

This article draws on reporting by The Express Tribune and Dawn.