The stock market began the week on a cautious note on Monday, with investors locking in gains from last week's record-breaking surge as renewed worries over revenue shortfalls and a widening trade gap tempered sentiment.

“The market, after a phenomenal run, has now run into some selling pressure and resistance. The major factors leading investors to take profits include the recent miss in the FBR collection, an increasing trade deficit, and, to a lesser extent, rising inflation," said Ahfaz Mustafa, CEO of Ismail Iqbal Securities.

"We have not seen any concrete policy actions from the government to address any of these issues yet. This, coupled with excessive leverage and high leverage rates, is also causing people to take profits,” he added.

The Pakistan Stock Exchange’s (PSX) benchmark KSE-100 Index settled at 167,752.40 points, down 1,237.67 points, or 0.73%, from the previous close of 168,990.07.

During the session, the index touched a high of 169,326.35 points, gaining 336.28 points, or 0.2%, and slipped to a low of 165,997.36 points, reflecting a decline of 2,992.71 points, or -1.77%, from the previous close of 168,990.07 points.

According to data released last week, the Federal Board of Revenue (FBR) collected Rs2.88 trillion in the first quarter of FY26, falling short of its Rs3.083 trillion target by Rs198 billion.

In September alone, collections stood at Rs1.23 trillion, missing the monthly target by Rs138 billion. Despite a 13% year-on-year rise, the pace remains insufficient to meet annual revenue goals, and the shortfall even missed the IMF’s conservative target of Rs3.023 trillion.

Meanwhile, the trade deficit widened nearly 46% year-on-year in September 2025 to $3.34 billion, as imports jumped 14% to $5.85 billion and exports fell 11.7% to $2.5 billion, according to the Pakistan Bureau of Statistics (PBS).

For the July–September quarter, the trade gap grew 32.9% to $9.37 billion, driven by rising imports and declining exports. Economists warned that the trend could pressure the rupee and foreign reserves, complicating debt repayments amid Pakistan’s dependence on external financing.

PBS data also showed the services trade deficit expanding 21.9% year-on-year in August to $437 million, with imports up 13.4% to $1.11 billion, outpacing the 8.4% growth in exports.

Weekly inflation, measured by the Sensitive Price Indicator (SPI), rose 0.56% during the week ended October 2, reflecting renewed price pressures after months of relative stability.

On Friday, the KSE-100 Index had gained 500.44 points, or 0.3%, to close at 168,990.07 points from 168,489.63 points. The highest index of the day remained at 169,988.62 points, while the lowest level was recorded at 168,613.41 points.