Shafaqna Pakistan: Pakistan’s annual inflation rate rose further in May, according to official figures released on Monday, while the stock market declined by nearly 2 percent as investors reacted to higher global oil prices, mounting inflationary pressures, and uncertainty surrounding the upcoming federal budget.
Data from the Pakistan Bureau of Statistics showed that headline inflation climbed to 11.7 percent year-on-year in May 2026, up from 10.9 percent in April. The figure represents the highest inflation level recorded in almost two years, largely due to increased global energy import costs linked to the conflict in the Middle East. On a month-to-month basis, consumer prices rose by 0.5 percent.
In its market review, Topline Securities stated that rising oil prices had renewed concerns about inflation and pressure on Pakistan’s external accounts, weakening investor sentiment and leading to widespread selling across major sectors of the stock market.
The benchmark KSE-100 index closed at 170,600 points, down 3,362 points, or 1.93 percent, after touching an intraday low of 3,565 points during the session.
Topline said the market remained under sustained selling pressure throughout the day as international oil prices rose amid escalating conflict between Israel and Lebanon, reviving concerns about inflation and Pakistan’s balance of payments outlook.
“The negative momentum was primarily driven by a surge in international oil prices amid rising geopolitical tensions in the Middle East,” the brokerage said.
The bearish sentiment was led by heavyweight stocks including Engro Holdings, Fauji Fertilizer Company, Lucky Cement, Hub Power Company and Oil & Gas Development Company, which collectively erased 1,464 points from the benchmark index, according to the report.
Market activity remained relatively robust despite the selloff, with total traded volume reaching 590 million shares and turnover standing at 31.98 billion rupees ($114.8 million). DCL was the most actively traded stock, with 43 million shares changing hands.
Pakistan has made significant progress in reducing inflation since the economic crisis that pushed consumer price growth above 30 percent in 2023, when soaring food and fuel prices, a weakening currency and dwindling foreign exchange reserves squeezed households and businesses.
Source: Dunya News
