The benchmark index of the Pakistan Stock Exchange (PSX) fell more than 600 points on Monday as the market reacted to the effects of political unpredictability, signalling the start of another week on a negative note.

The index dropped below 40,000 points against a backdrop of a deteriorating political situation coupled with weak economic data.

The political unrest caused by the struggle for power in the nation, the dissolution of the Punjab assembly, and the elections for local bodies in Sindh had an effect on the business climate.

Further dampening investor confidence were worries about monetary policy rate increases, the rupee's decline versus the dollar, and the postponement of the ninth review of the International Monetary Fund (IMF) programme.

The benchmark KSE-100 index fell by 602.70 points (1.49%) at closing to end the day at 39,720.75.

In its post-market analysis, Arif Habib Limited noted that due to the ongoing political unrest, the work week began with generally negative feelings, which caused the index to trade in the negative region the whole session.

The index reached an intraday low of 662.70 points and ended the trading day in the negative territory, the report said, adding that investor engagement remained slow overall. The volumes also remained thin overall.

Exploration and production (-132.1 points), technology and communication (-97.1 points), cement (-63.2 points), fertiliser (-57.1 points), and commercial banks were among the sectors that contributed to the performance (-56 points).

During the session, shares of 314 different firms were exchanged. 65 scrips closed in the green at the close of trading, 228 in the red, and 21 were unchanged.

Compared to Friday's total of 173.26 million shares, total trading volumes decreased to 105.54 million shares. Shares were traded for a total of Rs3.20 billion during the day.