KARACHI: The Pakistan Stock Exchange (PSX) extended its losses for a second consecutive session on Tuesday, October 20, 2026, as concerns over a possible interest rate increase ahead of the State Bank of Pakistan’s October 26 monetary policy meeting weighed on investor sentiment.
The benchmark KSE-100 Index declined by 814 points to close at 165,151, continuing the downward trend seen at the start of the trading week.
Market participants linked the selling pressure to growing expectations that persistent inflation could prompt the central bank to raise its policy rate at the upcoming meeting.
The index moved within a range of 1,314 points during the session, reflecting fluctuations in trading as investors assessed the outlook for inflation and borrowing costs.
PSX loses Rs118 billion in market value
Trading activity remained substantial despite the decline, with approximately 440 million shares changing hands during the session.
The total value of shares traded stood at Rs19.42 billion, according to market figures.
The selling pressure also reduced the market’s overall capitalisation by Rs118 billion, bringing the total value of listed companies to Rs18.306 trillion.
The decline marked the second straight day of losses for the benchmark index, with uncertainty over the direction of monetary policy emerging as a key concern for investors.
Interest rate decision in focus
Market sources said expectations of a possible increase in interest rates had strengthened amid inflationary pressures, contributing to the negative trend in equities.
The State Bank of Pakistan’s monetary policy meeting, scheduled for October 26, is now a key event for investors assessing the outlook for financing costs and economic conditions.
Higher interest rates can increase borrowing costs for businesses and influence investment decisions, making monetary policy expectations an important factor in stock market performance.
However, no decision on the policy rate has been announced, and expectations of an increase remain market speculation.
The KSE-100 Index closed Tuesday’s session at 165,151 points, with investors awaiting greater clarity on the central bank’s next monetary policy decision.