Market view

The KSE-100 is about 11% below its January peak of 189,167 and is testing 168,000, where its 200-day average and the 60-day low meet. On 1 October it fell 1,332 points to 168,637. Oil above $95, inflation above 10% and an 11.5% policy rate are the headwinds; an IMF staff-level agreement is the main catalyst.

Correction inside a long-term uptrend

Key levels

189,167Resistance

182,200Resistance

173,300Resistance

171,500Resistance

168,000Support

160,000Support

152,000Support

KSE-100 now168,580

Nearest level: support at 168,000 (+0.35% away). Levels from the danioPSX market view of 2026-10-01.

What is driving the market

Oil shock
The war involving Iran has kept the Strait of Hormuz disrupted. Brent rose about 13% in September to roughly $97 to $103, which raises Pakistan's import bill and inflation.
Inflation and rates
CPI eased to 10.3% in September from 11.1% in August, but prices still rose 1.3% in the month. The State Bank held the policy rate at 11.5% on 14 September; cuts look unlikely until inflation falls further.
IMF review
The mission for the fourth EFF review began in late September. A staff-level agreement would release about $1.2bn and is the market's main upside catalyst.
Who is buying
Individuals and banks are net buyers; foreigners and mutual funds are selling. Local money is holding the market up.

Scenarios to year-end

Bull case

about 30% likely

IMF deal, Brent below $90 and easing inflation: the index reclaims 173k and heads for 182k to 189k.

Base case

about 45% likely

IMF deal but oil stays high: a 166k to 178k range where stock picking in oil producers and banks pays.

Bear case

about 25% likely

Escalation with oil above $110, an inflation surprise or IMF delay: a close below 168k opens 160k, then about 152k.

Sector views

Sector	Our view	Today (avg.)	Why	Stocks, live
Oil and gas exploration	Overweight	−0.43%	High oil lifts rupee revenue; gas circular-debt plan; P/E of 5.6 to 8.7	OGDC −0.4%PPL −0.4%MARI −1.2%POL +0.2%
Banks	Overweight for income	+0.12%	High rates protect margins; dividend yields of 7 to 10%	UBL +0.7%MCB −0.1%MEBL −0.4%HBL −0.3%ABL +1.2%BAHL −0.5%
Fertiliser	Neutral to positive	−0.64%	Defensive with steady dividends; gas-price risk	FFC +0.0%EFERT −0.5%FATIMA −1.4%
Fuel marketing and refineries	Trade only	+0.45%	Inventory gains from high oil against circular debt; very liquid	PSO +1.7%ATRL +1.2%CNERGY −1.5%
Cement, autos and steel	Underweight	−0.36%	Hurt by high rates and weak northern cement sales	LUCK −0.5%MLCF −0.4%DGKC −0.4%INDU −0.1%