The Pakistan Stock Exchange saw a sharp decline on Tuesday, with the KSE-100 Index dropping by 718.51 points to close at 118,971.12. This fall of 0.6% came as investors grew more cautious ahead of the upcoming federal budget. Many fear that tough reforms linked to the International Monetary Fund (IMF) may be included.
This downturn followed Monday’s flat session, where the market reached an all-time intraday high of 120,285.55. However, it ended the day with a modest 40-point gain. That brief high was followed by selling pressure, indicating that traders were already uncertain about the market’s next direction.
Most of Tuesday’s losses came from large-cap sectors. Banking, oil, gas, and automobile companies led the decline. Stocks like MCB, UBL, PSO, OGDC, POL, and PPL saw drops. Analysts pointed out that fear of new taxes and subsidy cuts in the FY26 budget may have triggered the sell-off. These changes could lower corporate earnings.
According to Ismail Iqbal Securities, investors are stepping back as they await key budget decisions. Their post-market note said sentiment was weak due to a lack of new positive news. They also added that most recent gains had already priced in positive expectations, and now the market needs stronger signals to recover.
Analysts expect more ups and downs in the days ahead. The government is preparing a budget that may include revenue targets demanded by the IMF. These could impact sectors like manufacturing, energy, and finance. Until details are known, many investors are likely to remain on the sidelines.