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PSX Remains Volatile as IMF Talks Stall and Global Economic Uncertainty Weighs on Investor Sentiment

In Business, News
October 10, 2025

Stock Market Faces Volatility Amid IMF Review and Global Uncertainty

The Pakistan Stock Exchange (PSX) remained range-bound on Friday, as investor sentiment turned cautious amid ongoing IMF negotiations and rising global economic concerns.

The KSE-100 Index saw sharp fluctuations, dropping 2,119.55 points (-1.29%) to hit an intraday low of 162,411.25 points before partially recovering. The index had earlier reached a day’s high of 165,262.85 points, gaining 0.44% during early trading hours.


Market Sentiment Hit by Geopolitical and Global Pressures

Stocks are under pressure due to rising security tensions and geopolitical uncertainty,” said Ahsan Mehanti, Managing Director and CEO of Arif Habib Commodities.

He added that declining global oil prices, along with weak global equities and concerns about the U.S. government shutdown, contributed to the bearish sentiment at the PSX.

Investors also reacted to fears surrounding potential U.S. tariffs and the ongoing economic impasse in Washington, which has entered its third week. The Republican funding bill rejection and crippled public services have created further instability in global markets, dampening investor confidence.


IMF Talks Remain Unresolved

Back home, the uncertainty surrounding Pakistan’s IMF review weighed heavily on investor confidence. Sources told The News that disagreements persist over external financing and the Governance and Corruption Diagnostic (GCD) Assessment report, both key requirements under the IMF’s Memorandum of Economic and Financial Policies (MEFP).

Officials, however, remain optimistic that these differences will be resolved within two weeks, paving the way for a staff-level agreement and easing market pressure.


Remittances Rise, Offering Economic Support

In a positive development, the State Bank of Pakistan (SBP) reported an 8.41% year-on-year increase in workers’ remittances for the first quarter (July–September) of FY2025–26, reaching $9.54 billion compared to $8.80 billion a year earlier.

September inflows stood at $3.18 billion, up 11.33%, led by Saudi Arabia ($750.9 million), the UAE ($677.1 million), the UK ($454.8 million), and the U.S. ($269 million).

Finance Adviser Khurram Schehzad stated that Pakistan received $38.3 billion in remittances last fiscal year and expects the figure to surpass $41 billion this year, reflecting strong overseas worker support for the economy.


Reserves Show Stability Despite Bond Repayment

According to the SBP, foreign exchange reserves rose by $20 million, reaching $14.42 billion in the week ending October 3, even after a $500 million Eurobond repayment.

Total liquid foreign reserves stood at $19.81 billion, while commercial banks’ reserves dipped slightly by $6 million to $5.39 billion.


KSE-100 Index Weekly Overview

On Thursday, the KSE-100 Index had already shown weakness, falling 735.94 points (-0.45%) to close at 164,530.81 points, compared to 165,266.75 points in the previous session. During the session, it touched a high of 166,729.97 points and a low of 164,306.77 points, highlighting continued volatility in the market.


Outlook

Analysts believe that clarity on IMF talks, global oil market recovery, and stability in the U.S. economy will determine the PSX’s near-term direction. Until then, investors are likely to trade cautiously, keeping exposure limited to blue-chip stocks with strong fundamentals