Story perspectives

KSE-100 Plummets 600 Points Amid Rate Hold, Gold Drops

1/28/2026

Summary

Story summary

The KSE-100 index dropped over 600 points on January 27 after State Bank of Pakistan (SBP) kept the policy rate at 10.5%, contrary to market expectations of a cut.
Analysts attributed the decline to profit-taking and cautious sentiment.
Gold prices in Pakistan fell Rs1,500 per tola as international prices exceeded $5,000 per ounce amid geopolitical uncertainty.
Analysts anticipate further market adjustments after the U.S. Federal Reserve's upcoming monetary policy decision.

History

Historical Context

The State Bank of Pakistan set a policy rate of 5.75% in 2016 to combat inflation, which peaked at 12.7% in 2011, undermining consumer confidence. This ongoing struggle to balance inflation control and economic growth reflects historical challenges in Pakistan's monetary policy, influencing market stability and investor sentiment as the central bank navigates economic expectations.

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Story summary

The KSE-100 index dropped over 600 points on January 27 after State Bank of Pakistan (SBP) kept the policy rate at 10.5%, contrary to market expectations of a cut.
Analysts attributed the decline to profit-taking and cautious sentiment.
Gold prices in Pakistan fell Rs1,500 per tola as international prices exceeded $5,000 per ounce amid geopolitical uncertainty.
Analysts anticipate further market adjustments after the U.S. Federal Reserve's upcoming monetary policy decision.

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