Key Takeaways
- • Pakistan Stock Exchange benchmark index declined 2,610 points or 1.5% week-over-week to close at 168,155 for the week ended October 2, 2026, driven by geopolitical uncertainty and energy market volatility.
- • US-Iran conflict tensions and elevated global oil prices weighed heavily on investor sentiment throughout the period, with Brent crude trading as high as US$105.3/bbl before declining to US$99.5/bbl by week's end.
- • September 2026 inflation moderated to 10.3% from 11.2% in August, reflecting disinflationary food-price pressures that provided some economic headwind relief.
- • Oil supply dynamics shifted during the week, with China's suspension of oil product exports and US pressure on Europe to release diesel stocks creating conflicting directional pressures on crude valuations.
Summary
The Pakistan Stock Exchange faced renewed selling pressure during the week of September 26 through October 2, 2026, as the benchmark index retreated 1.5% week-over-week amid a confluence of geopolitical and macroeconomic headwinds. The 2,610-point decline brought the index to 168,155, reflecting broad-based investor caution as uncertainty surrounding the US-Iran conflict continued to reverberate through emerging markets.
Energy markets remained the primary driver of PSX weakness throughout the week. Oil prices sustained elevated levels for the majority of the period, with crude trading near US$105.3 per barrel as supply chain disruptions and China's halting of oil product exports offset the stabilizing effect of recovering Gulf crude flows. However, pressure mounted toward week's end as the US pushed European nations to release diesel reserves from strategic stockpiles, contributing to a decline in Brent crude to US$99.5 per barrel by the close. This commodity volatility directly impacted domestic sentiment, particularly for energy-sector equities and oil marketing companies, which are significant components of the PSX index.
Domestically, inflation showed signs of moderation, with September 2026 readings declining to 10.3% year-over-year from 11.2% in August, driven by disinflationary pressures in food prices. While this metric represents an improvement in Pakistan's cost-of-living trajectory, the headline remains elevated and offers limited near-term support for equity valuations in an environment dominated by external shocks and global energy uncertainty.
Energy markets remained the primary driver of PSX weakness throughout the week. Oil prices sustained elevated levels for the majority of the period, with crude trading near US$105.3 per barrel as supply chain disruptions and China's halting of oil product exports offset the stabilizing effect of recovering Gulf crude flows. However, pressure mounted toward week's end as the US pushed European nations to release diesel reserves from strategic stockpiles, contributing to a decline in Brent crude to US$99.5 per barrel by the close. This commodity volatility directly impacted domestic sentiment, particularly for energy-sector equities and oil marketing companies, which are significant components of the PSX index.
Domestically, inflation showed signs of moderation, with September 2026 readings declining to 10.3% year-over-year from 11.2% in August, driven by disinflationary pressures in food prices. While this metric represents an improvement in Pakistan's cost-of-living trajectory, the headline remains elevated and offers limited near-term support for equity valuations in an environment dominated by external shocks and global energy uncertainty.
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