The Pakistan Stock Exchange (PSX) experienced a turbulent February 2026, with the benchmark KSE-100 index posting a significant monthly decline of 8.7% MoM (Month-on-Month), shedding approximately 16,112 points to close the month at 168,062 points.
This marked one of the steepest monthly drops in recent history, driven by persistent weak market sentiment amid geopolitical tensions (including border issues with Afghanistan), foreign investor selling pressure, disappointing corporate earnings expectations, and broader concerns over economic indicators.
Key highlights from the period include:
Sharp single-day plunges earlier in the month, with record or near-record falls (e.g., over 6,600 points on one day and 5,400+ on another), reflecting extreme volatility.
Average daily trading volumes dropped sharply by 29% MoM to around 770 million shares, while traded value fell 37% in USD terms to USD 141 million.
Net foreign institutional investor outflows were notable, particularly in commercial banks and other sectors, contributing to the downward pressure.
Despite the monthly setback, the index showed some recovery in late February (e.g., a rebound of over 4,200 points on February 26/27 sessions), but overall sentiment remained cautious due to ongoing macroeconomic and external risks.
Positive notes included gradual macroeconomic improvements (e.g., current account surplus in January, LSM growth, and remittance inflows), though these were overshadowed by immediate market concerns.
This performance contrasts with the strong gains seen in prior periods (e.g., the index hit all-time highs near 191,000 in January 2026 before the correction).